Country's biggest lender to expand its Saudi business in second half of 2018
Kuwait's NBK second-quarter profit up 16% on strong domestic conditions
National Bank of Kuwait (NBK), Kuwait’s largest lender, posted a 16.3 per cent rise in net profit in the second quarter of 2018, boosted by a strong domestic operating environment and increased spending on infrastructure in the Arabian Gulf, and said it plans to expand its business in Saudi Arabia, the region’s largest economy.
Second-quarter net profit grew to 92.3 million Kuwaiti dinars (Dh1.13 billion) from 79.3m dinars in the year-earlier period – the strongest growth the bank has registered in six quarters, NBK said on Monday.
Net operating income grew by 10.9 per cent year-on-year to 442.2m dinars during the second quarter, driven by robust lending volumes, improving margins and strong fee business. Total assets grew by 5.7 per cent 26.9bn dinars while total shareholders’ equity increased by 4.1 per cent to 3bn dinars.
The Kuwait Stock Exchange-listed lender is “on track to record another year of record profits”, said NBK chairman Nasser Al Sayer. “The domestic operating environment continues to drive our positive outlook growth.
“We continue to witness capital spending plans in place; that was evident in the recent budget where capital spending is on an upward trend,” he said.
GCC banks are forecast to post rising profits in 2018 due to lower costs and a stabilising macroeconomic environment, according to analysts including Moody's Investors Service and S&P.
NBK plans to expand its branch network in Saudi Arabia in the second half of 2018 to three branches from one at present, to capitalise on the region’s largest economy, it said. It also plans to inaugurate wealth management services in the kingdom through a Saudi Capital Markets Authority-licensed entity.
Net income from international operations reached 28.2 per cent of the group’s total profit in the first half of the year.
“Our key growth markets regionally are the GCC along with Egypt, and we continue to identify organic growth opportunities in international markets,” said NBK’s group chief executive Isam Al Sager.
NBK reported a 6.3 per cent year-on-year increase in customer loans and advances to 15.2bn dinars as of the end of June 2018, while customer deposits grew by 7.8 per cent to reach 14.6bn dinars over the same period.
The bank’s NPL (non-performing loans) ratio was 1.40 per cent for the quarter and capital adequacy ratio stood at 17.2 per cent.
Separately, Kuwaiti Islamic lender Boubyan Bank – which is majority-owned by NBK – posted an 18 per cent increase in second-quarter profit. “Boubyan Bank positions NBK Group in a very favourable position, being the only Kuwaiti bank with access to both markets, conventional and Islamic,” Mr Al Sager said.