National Bank of Kuwait approves 35% dividend on steep profit rise
The lender saw record net profits for 2018 on expansion and risk mitigation strategy
The board of National Bank of Kuwait, the country's largest lender by assets, approved the distribution of a 35 per cent cash dividend to shareholders, based on strong financial performance in 2018.
The dividend equated to 35 fils (Dh4.2) per share and the board also approved the distribution of a 5 per cent bonus share, NBK said in a statement on Saturday.
“NBK Group achieved strong performance across all business segments in 2018, reflecting the bank’s strategy to expand its international operations…[and] affirm its leadership in the local market,” said NBK group chief executive Isam Al Sager.
NBK, whose shares are traded on the Boursa Kuwait exchange, recorded a 15 per cent year-on-year increase in net profit for full-year 2018, to reach a record 371 million Kuwaiti dinars. The bank's performance was driven by increased spending on infrastructure in the Arabian Gulf, higher income from Islamic financing, a rise in fees and commissions and an improvement in consumer confidence.
Operating profit growing by 8.9 per cent year-on-year to 606.9m dinars, driven by growth in financing activities, growth in income from fees and commissions and effective cost management policies that resulted in a cost-to-income ratio of 31.3 per cent, according to the statement.
Total assets rose by 5.4 per cent to reach 27.4bn dinars, customer loans rose 6.9 per cent 15.5bn dinars, and customer deposits rose by 4.4 per cent to reach 14.4bn dinars.
“The solid results reflect the bank’s solid financial performance and the soundness of its risk mitigation strategy through diversifying its sources of income and expanding into new geographies, while maintaining competitive advantage in the local market by providing conventional and Islamic banking services through our subsidiary Boubyan Bank,” Mr Al Sager said.
International banking operations accounted for 30.4 per cent of the group’s net profit in 2018, up from 29.4 per cent in 2017. Global expansion last year was mainly focused on the Egyptian market, which constitutes around one third of the bank’s total international profits driven by strong income growth in consumer banking.
NBK’s “conservative” approach to risk mitigation last year resulted in strong long-term credit ratings and a healthy ratio of non-performing loans to gross loans, of 1.38 per cent, the statement added.
The group also maintained a high level of capitalisation, with a capital adequacy ratio of 17.2 per cent as of the end of 2018 – exceeding the Central Bank of Kuwait’s requirement.
Updated: March 9, 2019 04:34 PM