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National Bank of Kuwait (NBK) reported a 7.8 per cent growth net profits of $929.7m (KD 282.2m) in 2015 from $862.6m (KD 261.8m) in 2014.
Total assets as of year-end 2015 reached $77.8bn (KD 23.6bn) up 8.3 per cent compared to year-end 2014, while total shareholders’ equity increased by 3.8 per cent to $8.6bn (KD 2.6bn). Customer loans and advances reached $44.6bn (KD 13.6bn) as of year-end 2015, growing by 13.8 per cent year-on-year, while customer deposits grew by 7.1 per cent during the same period to reach $39.7bn (KD 12.1bn) as of year-end 2015.
NBK continued to improve its asset quality ratios with non-performing loan (NPL)/gross loan ratio dropping to 1.34 per cent as of year-end 2015 down from 1.50 per cent a year earlier, and NPL coverage ratio increasing to 322 per cent, up from 276 per cent at year-end 2014.
NBK board of directors has proposed the distribution of 30 fils per share cash dividend, representing 30 per cent of the nominal share value. The board has also proposed the distribution of a 5 per cent bonus shares (5 shares for every 100 shares) for the year 2015.
“2015 was a year of deliverables for NBK, where we saw a confirmation of our earlier view that Kuwait is moving into a new era of economic development,” said NBK chairman Nasser al-Sayer. “Activity is picking up as the government continues to deliver on the awarding and execution of mega projects. This has reflected positively on the growth trends of NBK’s operating income. During the year, several multi-billion dollar development projects have been awarded where NBK played a major role in their financing. With the size of our balance sheet, regional & international presence and relationships, we proved to be the largest beneficiary of the growing government expenditure, leveraging the high growth opportunity in the project finance business.”
Al-Sayer said that Kuwait has ample liquidity and substantial buffers making the impact of lower oil prices relatively less compared to other regional economies. The government has affirmed in several occasions its commitment to continue with its capital expenditure plan mainly on infrastructure projects which we believe will relatively contain the impact of a period of lower oil prices on the operating environment in Kuwait.”
Isam Al-Sager, NBK’s Group Chief Executive Officer said regional and international operations remained very lucrative supporting the bank’s income diversification strategy. NBK Group generated 27 per cent of the year’s profits from its branches, associates and subsidiaries outside Kuwait affirming the banks’ successful strategy of regional and international diversification.
concluded its exit from International Bank of Qatar (IBQ) in 2015, selling its 30 per cent stake when attempts to raise it to a controlling stake were not successful.
Al-Sager said that the Egyptian market remains a key market for the growth of NBK on the back of improving business sentiment and political stability. “
NBK boosted its capital base in 2015 through issuing $700m Additional Tier-1 (AT-1) securities and KD 125m of Tier 2 subordinated bonds. The issuances are used to improve NBK’s capital in line with Basel III requirements and the directives of the Central Bank of Kuwait and both issuances. As of end-December 2015, NBK’s capital adequacy ratio (CAR) reached 16.8 per cent exceeding regulatory requirements.