NBK reports 7.6% rise in third-quarter net profit from drop in bad loans
Total operating revenue climbs 0.6% to 220.8 million Kuwaiti dinars
National Bank of Kuwait, the biggest lender in the country by assets, reported a 7.6 per cent year-on-year rise in its third-quarter net profit, as provisions for bad loans fell and non-interest income climbed.
Net profit for the three-month period ending September 30 rose to 93.1 million Kuwaiti dinars (Dh1.12 billion), the lender said in a statement to Boursa Kuwait, where its shares are traded. The bank reported third-quarter operating revenue of 220.9m dinars, a 0.6 per cent year-on-year increase, and operating profit of 107.4m dinars, a 6.2 per cent increase on the same period last year, according to the bourse filing.
“The bank continues to operate in a challenging macroeconomic environment, but we are pleased that despite headwinds we are growing our business – and its profitability – across the region,” said NBK group chairman, Nasser Al Sayer.
“Although there has been slower demand for credit in Kuwait, we have seen growth in our loan book, and we expect this trend to continue until the end of the year. By continuing to focus on our strategy to diversify and digitalise our operations we have seen incremental and
continuous top and bottom-line growth across business units and geographies,” he said.
During the nine-month period, the net profit of NBK increased to 302.2m dinars, from 272.4m dinars a year earlier. Total operating revenue increased 1.7 per cent to 672.8m dinars.
The total assets of NBK climbed 6.6 per cent to reach 28.9bn dinars, while its liabilities rose 6.4 per cent to 25bn dinars, the lender said. Customer deposits increased 12.2 per cent to reach 15.8bn dinars.
“In terms of income diversity, it is particularly pleasing to have achieved solid growth across units, with robust bottom-line contributions made by international operations, consumer banking and our Islamic subsidiary – Boubyan Bank – for the period ended September 30,” said NBK group chief executive Isam
The outlook for banks in the Arabian Gulf remains stable, despite the threat of a worsening economic environment, ratings agency S&P Global said on Wednesday.
“In our view, GCC banks will successfully navigate a less-than-favourable macroeconomic environment in 2020 supported by their solid financial profiles,” S&P Global said.
Many banks took the opportunity to take conservative provisions against potential bad loans last year following the switch to new accounting standards (IFRS 9), the ratings agency said.
S&P Global expects the Gulf economies “to show modestly stronger economic growth in 2020 after a dip this year, but that growth will remain lower than in the period in the early part of the decade when oil prices were over $100 per barrel.
“Growth will also likely be constrained against the backdrop of a broader global slowdown,” the ratings agency said.
Updated: October 10, 2019 08:38 PM