dividend and 5% bonus shares
12/03/2018 05:14 AST
NBK's Chairman Nasser Al-Sayer affirmed that "NBK Group has achieved strong performance across all business segments during the year 2017. The Group witnessed a remarkable increase in profitability while continuing to maintain its leading position in the domestic market through providing a comprehensive range of financial products and ultimately delivering a more complete experience to its customers."
This came in Al Sayer's message at NBK's Ordinary (AGM) and Extraordinary (EGM) General Assembly meeting for 2017 that was held today (10 March 2018), at which there was a quorum of 78.079 %. The AGM and EGM approved the Board of Directors' recommendation to distribute 30% cash dividend to shareholders (equivalent to 30 fils per share) and the distribution of 5% bonus shares (5 shares for every 100 shares owned).
"NBK continued to benefit from Kuwait's solid economy, which remains largely influenced by public sector spending", said Al Sayer. "NBK is proud of playing a vital role in driving the growth of the national economy through participating in the financing of most of the country's major public/private projects, in Oil and Gas as well as other sectors."
Al Sayer added that "NBK is keen to enhance its contribution to the economic development embodied in Kuwait's future vision - 'New Kuwait 2035'. The country remains a financial safe haven in a region experiencing both economic and political uncertainty. This is borne out by the strong sovereign ratings that have been issued by Moody's, Standard & Poor's and Fitch."
Solid Performance
"NBK continued its strong performance during 2017 achieving net profits of KD 322.4 million growing at 9.2% year-on-year. The solid results confirm the Bank's successful conservative strategy, prudent risk management in addition to the Bank's commitment in applying the highest standards across the different business sectors" said Al Sayer.
"The Bank continues to enjoy a leading position in the domestic market given its strong financial position and its deep understanding of customers' needs. NBK continues to provide its clients with innovative and diversified products and services while still maintaining the Bank's unique position in leading and financing development projects.
"Growth in revenues from Islamic Banking continued through Boubyan Bank, our fully consolidated Kuwaiti subsidiary, leading to a growing contribution to Group consolidated profits. In 2017, Boubyan Bank's Total Assets grew by 14.0%. The Bank is led by a highly experienced and committed management team, which is fully aligned with NBK's corporate culture."
"NBK's International operations saw another year of sustained growth and stability. Our international operations remained highly profitable contributing 27.7% of the Group's total profits through improving synergies and business optimization. This reflects the strength of the Bank's franchise and reputation across the world."
Financial Performance
NBK's Group CEO Isam Al Sager said that "despite a prevailing backdrop of low but stabilising oil prices, NBK maintained leadership across core banking segments in Kuwait, defending our position as the country's foremost financial services provider."
"NBK profits accounted for 40% of the banking system's profits in 2017. On the other hand, the Bank accounted for around 43% of the system dividends."
"Total assets as of year-end 2017 reached KD 26.0 billion (USD 86.3 billion) up 7.4% compared to year-end 2016 while customer deposits grew by 9.3% year-on-year to reach KD 13.8 billion (USD 45.7 billion). Customer loans and advances reached KD 14.5 billion (USD 48.1 billion) as of year-end 2017, 6.5% up from last year's levels" Al Sager added.
Al Sager also mentioned that the Group reported net profits of KD 322.4 million (USD 1,068 million) for the period, a 9.2% increase on 2016. The growth in operating surplus (Net Operating Income less Operating Expenses) was particularly strong, growing 13.0% year-on-year to KD 557.2 million (USD 1,847 million).
The contribution to Group earnings from Islamic Banking continued to demonstrate the benefits of NBK's long-established strategy of earnings diversification, NBK recorded solid and continued growth at the Bank's Islamic banking subsidiary, Boubyan Bank. Profits at Boubyan Bank grew by 15.9%, to KD 47.6 million (USD 157.8 million).
International Operations
In the context of international operations, earnings from international operations contributed to 27.7% of 2017 Group earnings. The Bank is committed to develop its international operations to furtherly diversify its income and minimize risks.
Al Sager added that "the strong growth achieved by the Bank in Egypt confirms its continued success in enhancing its position in the Egyptian market, which is one of the main growth markets for NBK Group. NBK-Egypt recorded a net profit of EGP 1,503 million in 2017 compared to EGP 849 million in 2016; growing at 77.07%, the highest growth rate in the Egyptian banking sector.
Al Sager pointed that the strength of NBK-Egypt profits are derived from operating profits resulting from the improvement in the business environment in Egypt and confirming the relevant stability in the market. NBK Group's investments in Egypt are strategic long-term investments and represents approximately one third of the Group's profits from international operation. This reflects the confidence that the Group has in the Egyptian market and pushes for further commitment by the Group to expand in Egypt.
"NBK continues to signify judicious and strategic identification of new and profitable markets. This was translated in 2017 where we began the process of establishing our wealth management business in Saudi Arabia. Having completed the licensing requirements, a CMA-regulated entity will launch in 2018. This new franchise, which will marry the services of both our Private Banking unit and NBK Capital, is designed to tap into the GCC's largest economy, as well as into its considerable depth of investible assets."
"NBK has also been granted an approval SAMA to open two new branches in Saudi Arabia in addition to our existing branch in Jeddah; a branch in Riyadh and a branch in Dammam. Likewise, in China, we opened a new branch in Shanghai, which will service the financing requirements of Chinese contractors participating in Kuwait's strong pipeline of infrastructure projects" said Al Sager.
Capital and Ratings
The Group maintained a strong level of capitalization throughout the year. NBK's capital adequacy ratio at year-end was 17.8% (17.7% in 2016). This level of capitalization is in keeping with NBK's risk appetite, and is comfortably in excess of NBK's Basel III capital adequacy requirement as determined by the Central Bank of Kuwait.
"Despite the challenging operating environment, NBK maintained its leadership in the banking sector in Kuwait. NBK continues to enjoy collectively one of the highest ratings among all banks in the Middle East from the three international rating agencies Moody's, Fitch Ratings and Standard and Poor's. The Bank's ratings are supported by its high capitalization, prudent lending policies, and its disciplined approach to risk management, in addition to its highly recognized and very stable management team" mentioned Al Sager. Moreover, NBK was named among Global Finance's list of the 50 safest banks in the world for twelve consecutive times.
Arab Times
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