ABK hosts EOY 2024 analyst conference

06/03/2025 04:48 AST

Al Ahli Bank of Kuwait (ABK) recently hosted its EOY 2024 analyst conference attended by Abdulla Al Sumait, Acting Group Chief Executive Officer; Shiamak Soonawalla, Group Chief Finance Officer; Abdulaziz Jawad, Chief Strategy Officer; and Osama Ezzeldin, Assistant General Manager of Strategy and Follow Up.

Strategic accomplishments
On this occasion, Al Sumait said, "Let me start by highlighting our financial performance. We are proud to report an increase in net profit attributable to shareholders, rising from KD 45.2 million in 2023, to KD 52.4 million in 2024. In addition, Earnings Per Share also grew by 17 percent, from 18 fils to 21 fils and our Capital Adequacy Ratio has increased to 16.94 percent in 2024 from 16.74 percent in 2023." He added that, over the year, ABK has selectively grown its loan portfolio by 13 percent year-on-year, with quality being its utmost priority evident in an NPL ratio of 1.23 percent compared to 1.33 percent in last year.

"Our extensive footprint drives revenue growth, efficient loan distribution, and strong deposit acquisition with our international operations, including our UAE branches and ABK-Egypt, contributing 45 percent of our operating income and 34 percent of our assets, highlighting their contribution to our success," elaborated Al Sumait. He further emphasized that ABK's solid performance in 2024 was the result of careful planning, close coordination and cooperation between our business lines across the Group, introduction of new products and services culminating in a successful execution of our strategy.

He highlighted, "During the year, ABK launched innovative offerings catering to Youth, Elite and SME segments, including upgrading the A+ youth offering, improved our credit card offering with 3 new credit cards and offering to SMEs with AlTajer Plus. Our latest milestone was the launch of ABK's all-new mobile banking in January 2025. This innovative platform delivers unmatched convenience, security and efficiency in banking."

Al Sumait closed, "Looking forward to 2025, we are steadfast in pursing our long-term vision, focusing on strategic expansion and capitalizing on growth opportunities across regional and local markets. We will continue to uphold the highest standards of excellence and deliver innovative, world-class solutions to our customers."

Excellent performance
On his part, Soonawalla said, "I am proud to announce another year of outstanding financial performance, with a net profit attributable to shareholders of KD 52.4 million, reflecting an impressive 16 percent increase in profitability compared to the prior year. Additionally, earnings per share for 2024 stood at 21 fils, representing a 17 percent growth compared to the 18-fils reported in the prior year. Moreover, ABK's operating income of KD 200.75 million and operating profit of KD 107.41 million, reflect our strong performance and effective execution of strategic initiatives."

From a risk management and stability perspective, the Group non-performing loan (NPL) ratio stood at 1.23 percent vs. 1.33 percent, while the Group loan loss coverage ratio remains exceptionally strong at 460 percent vs. 445 percent year-on-year. Furthermore, ABK continues to hold provisions amounting to KD 204 million, which exceeds the requirements set forth by IFRS 9 according to Central Bank of Kuwait guidelines.

Soonawalla added, "We continued to maintain our net interest margin at 2.1 percent levels, stabilizing our earnings. Analyzing the key drivers of performance, the Group achieved a 9 percent increase in total operating income compared to the previous year. Additionally, our Return on Average Equity (ROAE) increased to 8.4 percent from 6.8 percent, a 24 percent year-on-year improvement. These achievements underscore our profitability and ability to deliver strong returns to our shareholders."

ABK's liquidity position remains exceptionally robust, supported by a net stable funding ratio of 109 percent and a liquidity coverage ratio of 281 percent. Additionally, its balance sheet is underpinned by customer deposits amounting to KD 4.4 billion, which represents 67 percent of total liabilities. "Our total interest income for 2024 reached KD 471.4 million, marking a significant year-on-year increase of KD 58 million, or 14 percent. This growth was primarily driven by increased asset levels and a favorable interest rate environment. Fees and commissions delivered a strong performance, contributing KD 37.1 million, reflecting a 6 percent increase compared to 2023. This consistent growth reflects the Group's ability to capitalize on core banking services and leverage diversified income streams, highlighting continued momentum in transaction-based income and an expanding client base," explained Soonawalla.

Furthermore, ABK's 11 percent increase in net operating profit demonstrates robust business performance and improved efficiency. The major contributions to operating income of KD 200.75 million for the year came from Commercial Banking (48 percent), Retail Banking (37 percent) and Treasury and Investments (15 percent). Our asset allocation reflects 57 percent in Commercial Banking, 12 percent in Retail and 31 percent in Treasury and Investments.

The Group's steadfast commitment to excellence is evident through continuous investment in key business initiatives, digital transformation, and process optimization. "These investments continue to enhance operational efficiency, reduce operating costs, and sustain long-term profitability. This is evident in ABK's cost-to-income ratio of 46.5 percent as of 2024 vs. 47.5 percent recorded in 2023," emphasized Soonawalla. As of 2024, the Group's total assets expanded to KD 7.4 billion from KD 6.3 billion, reflecting robust growth of 17 percent year-on-year. Net loans and advances grew by 13 percent, rising from KD 4.3 billion in 2023 to KD 4.8 billion in 2024.

Soonawalla summarized, "Our 2024 financial performance highlights robust loan growth, improved credit risk management, and a strengthened balance sheet, ensuring sustainable financial performance, adequate liquidity and a resilient capital position to support future expansion. With this strong foundation and strategic focus, we remain favorably placed to continue to create enduring value for our investors."

International economy
Discussing the global economy, Jawad stated, "The global economy continues to experience fluidity and volatility, which will most certainly have an impact on global growth projections. In its January 2025 world economic outlook update, the IMF projects a 3.3 percent growth for 2025, which is marginally higher than its 3.2% projection back in October.

Jawad emphasized that, Kuwait in specific is projected to witness a major transformation in its economic growth as the IMF forecasts an economic expansion of 3.3 percent in 2025, 50 bps higher than the previous forecast. Furthermore, the Kuwaiti economy is expecting two milestones which will have a seismic impact on economic activities, namely the public debt law and the mortgage law, which are both anticipated in the near future.

Jawad added that despite the challenging global macroeconomic environment of 2024, ABK has successfully navigated its path to solid results. "ABK Kuwait's strategic focus on salaried Kuwaitis and high-income expats has driven strong customer base and market share growth. For instance, our retail loan portfolio has experienced growth at double the pace of the market, while our credit cards' business has grown at close to double the market rate, supported by enhanced cross-selling to the existing base and new-to-bank customers," he said.

"Additionally, we have modernized our branch network, introducing a new branch concept in Jabriya, Salmiya, and Zahra, reinforcing our strategy to enhance the service quality across all customer touchpoints," Jawad highlighted. ABK continues to enjoy strong credit ratings of 'A' from Fitch and 'A2' from Moody's, reflecting its solid financial position, prudent risk management and strategic long-term investments. Additionally, in Q4-2024, ABK received global recognition, securing eight prestigious awards.

Egypt and the UAE
Shifting the focus to Egypt, Jawad elaborated that the country is on track regarding the IMF program as it continues its economic reform program and is unlocking its economic potential in the MENA region. In November 2024, Fitch upgraded Egypt's credit rating one notch from 'B-' to 'B,' citing stronger external finances, recovering FX buffers and greater confidence that the more flexible exchange rate policy will prove more durable than in the past.

Notwithstanding the turmoil in the region, IMF estimates an economic growth of 3.6 percent for Egypt, on the back of a loosening of monetary policy and the resumption of Suez Canal flows. Having said that, robust tourist inflows have helped stabilize external balance and improve the country's net international reserves which hit a record USD 47.1 billion in December 2024.

Jawad stated, "ABK-Egypt continues to deliver on the successful execution of its strategy and further strengthen its presence in the country." Last but not least, Jawad emphasized that 2024 was a stellar year for ABK-UAE and the Bank's DIFC presence, with sixteen syndicated loan transactions concluded during the year. The transactions' value crossed the USD 10 billion mark, spanning across various jurisdictions in the GCC, Europe and Asia.

Jawad reflected, "As communicated during our Q3-2024 earnings call, the hybrid pricing model for the UAE mortgage offering was in progress, and has now been successfully launched. This enables our valued customers to fix the mortgage interest rate for the initial year before moving on to market-derived floating rate. This thus offers customers the flexibility to lower their commitment in the initial year and manage their cashflow."

ESG
In what pertains to ESG, ABK is finalizing a number of crucial ESG milestones, which include the Sustainable Finance Framework to govern potential ESG issuances and loans, as well as the ESG Policy Framework to govern ABK's ESG performance. A 5th edition of our sustainability report is also in progress, where, among various outcomes, ABK aims to have a more comprehensive greenhouse gas (GHG) inventory, as well as expansions of our ESG Strategy via tools like an implementation plan (IP) and a monitoring & evaluation (M&E) framework. Concluding his statement, Jawad said, "Looking ahead to 2025, ABK remains dedicated to executing its strategy effectively, fostering sustainable growth and long-term value for our shareholders."

Kuwait Times