In a recent interview with CNBC Arabiya, Kuwait Finance House (KFH) CEO Mazin Al-Nahedh explained that KFH continues to focus on long-lasting profitability and gave financial results from 2015.
“KFH's policy focuses on increasing sustainable profitability and the core banking business,” Al-Nahedh said. “This has been translated in the 2015 financial results, where KFH posted a net profit of KD 145.8 million, an increase by 15.3 percent over last year.”
During the interview, which was conducted at KFH headquarters, Al-Nahedh discussed how the KFH's exposure to stocks is insignificant, explaining that 92 percent of guarantees on existing financing accounts are against financial or real estate guarantees. KFH’s total provisions at the end of 2015 reached KD 668 million, which was an increase of 1.83 percent over the same period last year.
“The finance portfolio increased by 8.1 percent to KD 8.127 billion, which is a healthy rate,” Al-Nahedh said. “KFH continues its efforts in expanding its banking business at the level of the group, while reducing the profits related to market volatility.”
The CEO did note that the non-performing loans decreased to 1.98 percent at 2015’s year end, from 2.46 percent in 2014. The group continues its cautious policy in ignoring provisions against NPLs, explaining that the bank had already set aside provisions against all its NPLs. Al-Nahedh noted that the fluctuating and at times volatile oil industry impacted the budget, specifying that the government made many choices that contribute to bettering the economy.
KFH lessened its share in Alafco Aviation Lease and Finance Company from 53 to 47 percent. Additionally, the Gulf Investment Corporation came on board as a chief shareholder. Al-Nahedh showed optimism in the government's ability to issue bonds -- given that banks experience high levels of liquidity -- making it an opportunity for them to take part in connecting the budget deficit.