National Bank of Kuwait's 2019 profit jumps on rise in revenue
Kuwait's biggest lender reported an 8.2% increase in its full-year net income
National Bank of Kuwait, the biggest lender in the country by assets, reported an 8.2 per cent year-on-year rise in its 2019 net income beating analysts’ estimates, as revenue climbed and provisions for bad loans fell.
Net profit for the 12 months ending December 31 rose to 401.3 million Kuwaiti dinars (Dh4.9 billion), the bank said in a statement to Boursa Kuwait, where its shares trade. Full-year net income beat 12-month a top analyst's estimate of 389.3m Kuwaiti dinars from Bloomberg.
The bank reported operating revenue of 895.5m dinars, a 1.4 per cent year-on-year increase in 2019. However, its net operating profit before credit and impairment losses dropped 2.6 per cent to 591.2m Kuwaiti dinars.
“The increase in net profit for the year … was primarily due to higher non-interest income and lower provision charges for credit losses and impairment losses,” the lender said, without providing figures in the bourse filing.
The main positive surprise from NBK's earnings was the decline in the cost of risk to about 52 basis points in the last quarter of the year — the lowest the lender had achieved for a long time, EFG Hermes said in a note to investors on Tuesday.
“We expect management to provide an update in Thursday’s earnings call on the outlook for the cost of risk in 2020. Should the [fourth quarter 2019] level be sustainable, there would be upside risks to our earnings growth forecast for NBK for 2020; we currently factor in 6 per cent earnings growth (before cost of tier-1 notes),” the Egyptian investment bank said.
NBK's total assets climbed 6.7 per cent to reach 29.3bn dinars, while its liabilities rose 5.4 per cent to 25bn dinars, the lender said.
The bank’s board recommended a cash dividend of 35 fils per share, representing 35 per cent of the nominal value of its stocks. It also recommended shareholders approve distribution of bonus shares of 5 per cent from the bank's issued and paid-up capital.
Updated: January 21, 2020 11:30 AM