Gulf Bank records KD 45.7 million in Net Profit for the first nine months of 2022
Net Profit increased by 66% compared to the first nine months of 2021
Jassim Mustafa Boodai:
- The Bank continued to make excellent progress with its growth strategy and digital transformation of the Bank’s core activities.
- Our deliberate focus on the Kuwait market was supported by the overall positive trends of the Kuwait economy.
- In a challenging global macroeconomic environment, Gulf Bank continues to deliver solid results and remains in a strong financial position to weather uncertain times, given its robust liquidity and credit quality.
- The growth, in both our Corporate and Consumer segments did not impact the asset quality of our portfolio.
Gulf Bank K.S.C.P. announced its financial results for the first nine months ending 30 September 2022. The Bank reported a net profit of KD 45.7 million, an increase of KD 18.2 million or 66% compared to 2021 first nine months net profit of KD 27.5 million.
Subsequently, the Bank’s return on assets improved from 0.6% in the first nine months of 2021 to 0.9% in the first nine months of 2022 and return on equity grew from 5.7% to 9.0%.
Gulf Bank recorded an operating income of KD 132.3 million for the first nine months of 2022, and an operating profit before provisions of KD 69.4 million for the same period.
The increase in the net profit was mainly driven by a 5% or KD 6.8 million increase in operating income, and a decline of 43% or KD 16.1 million in total provisions and impairment losses.
As for asset quality, the non-performing loans (NPL) ratio stood at 1.2% as of 30 September 2022, lower than the prior year level of 1.3%. Additionally, the Bank continues to have significant non-performing loans coverage ratio of 450% including total provisions and collaterals.
Total credit provisions as of 30 September 2022 reached KD 310.5 million whereas IFRS 9 accounting requirements (i.e., ECL or expected credit losses) were KD 201.9 million. As a result, the Bank has very healthy excess provision level of KD 108.6 million, above and beyond what is required by the IFRS 9 accounting requirements.
Compared to 30 September 2021, total assets increased by 11% to KD 7.1 billion, loans and advances to customers increased by 12% to KD 5.0 billion, and shareholders’ equity increased by 8% to reach KD 704.3 million. Customer deposits reached KD 4.5 billion, an increase of 8% compared to the prior year.
The Bank’s regulatory Tier 1 ratio of 13.0% was 2.5% above the regulatory minimum of 10.5% and the Capital Adequacy Ratio (CAR) of 15.1% was 2.6% above the regulatory minimum of 12.5%.
Commenting on the results, Mr. Jassim Mustafa Boodai, Gulf Bank’s Chairman said: “I am pleased to report that Gulf Bank has delivered a strong performance in the first nine months of 2022 with a net profit of KD 45.7 million. The Bank continues to make excellent progress with its growth strategy and digital transformation of the Bank’s core activities. Our deliberate focus on the Kuwait market was supported by the overall positive trends of the Kuwait economy. This is supported by higher oil prices and an improved fiscal position.” Boodai added.
Mr. Boodai concluded his remarks by stating: “On behalf of the Board of Directors, I would like to thank our shareholders for their ongoing trust, and our employees for their commitment and dedication. I would also like to thank the Central Bank of Kuwait for their continuous support. Last but not least, I want to thank our clients for their loyalty, and reiterate our commitment to offering them the best banking experiences.”
On the Bank’s performance for the period ending 30 September 2022, Mr. Tony Daher, Gulf Bank’s Chief Executive Officer said: “In a challenging global macroeconomic environment, Gulf Bank continuous to deliver solid results and remains in a strong financial position to weather uncertain times, given its robust liquidity and credit quality. During the third quarter of 2022, we maintained solid growth momentum across the Bank’s divisions, with a strategic focus on enhancing digitization to support the needs and requirements of our customers. The successful execution of our strategy is demonstrated by our strong financial position and robust loan growth, as our total assets crossed KD 7 billion and our customer loans reached KD 5.0 billion.” Mr. Daher added:” The growth, in both our Corporate and Consumer segments did not impact the asset quality of our portfolio, which remains healthy. This is reflected in our NPL ratio of 1.2% and a non-performing loans coverage ratio of 450%, including total provisions and collateral for the period”.
Education & Awareness
As part of its ongoing commitment toward social sustainability, Gulf Bank is contributing to the enhancement of the financial literacy of its employees, clients, and the general public. This commitment is evident in the Bank’s continuous support of “Diraya Campaign”, now, for the second year in a row.
The Bank conducted several cybersecurity campaigns through different communication channels to raise the awareness of cybercrime. The Bank has also launched several initiatives on financial literacy to educate customers on means of savings and investments. In addition, the launch of Gulf Bank’s “Let’s Talk Business” podcast episodes is dedicated to presenting entrepreneurial stories in a simplified economic framework.
On the digital transformation front, Gulf Bank launched its first Hackathon competition as part of its ongoing digital transformation initiatives and as a support of the national development plan, Kuwait Vision 2035. The Hackathon is one of the Bank’s multiple initiatives aimed at identifying innovative talents from the community and learning about new ideas. The initiative is part of Gulf Bank’s digital transformation strategic plan for the year 2025.
Gulf Bank continues to be well recognized internationally in terms of its creditworthiness and financial strength.
During the year 2022, Capital Intelligence has affirmed Gulf Bank’s Long-term Foreign Currency ratings at “A+”. At the same time, Capital Intelligence has also affirmed the Bank’s KWD50 million Basel III-compliant Tier 2 Subordinated Bonds rating at “BBB+” with a “Stable” Outlook for both the Bank and Bond rating.
In addition, Moody’s Investor Services maintained Gulf Bank Long-Term Deposits rating of ‘A3’ with a ‘Stable’ Outlook.
On the other hand, Gulf Bank has a Long-Term Issuer Default Rating of ‘A’ with a ‘Stable’ Outlook by Fitch Ratings. Fitch has also upgraded the Bank’s Viability Rating to “bbb-“ from “bb+” during the first quarter of 2022.