15 February 2021
Al Ahli Bank of Kuwait (ABK) announced its financial results for the year ended 2020. The Total Operat-ing Income was KD 141.5 Million, an 18 percent drop compared to the same period in 2019.
The COVID-19 pandemic has greatly disrupted the business of global and local companies and led to almost a halt in commercial and economic activities locally and internationally, causing massive effects on social, commercial and economic levels.
As a result of the Board of Directors' resolution to take prudent and proactive measures to mitigate potential credit losses resulting from some customers affected by the economic crisis caused by the Coronavirus pandemic, and especially taking into account that the pandemic has not yet ended, and still represents risks to business continuity, the Bank has conservatively taken provisions amounting to KD 136.5 Million, resulting in a Net Loss of KD 69.7 Million for the year ended 2020. The Capital Adequa-cy Ratio stood at 17.26 percent while the Non-Performing Loan (NPL) ratio was 1.57 percent and NPL coverage was 339 percent.
Loans and advances decreased by 3 percent compared to 2019, to reach KD 3.1 Billion while customer deposits increased by 5 percent to reach KD 3.5 Billion compared to KD 3.3 Billion in 2019. Sharehold-ers’ Equity stood at KD 499 Million.
The Board of Directors has recommended the distribution of 5 percent bonus shares to registered Shareholders. This recommendation is subject to approval at the Bank’s Annual General Meeting.
Talal Mohammed Reza Behbehani, Chairman of ABK, said: “2020 was a landmark year of unprecedented challenges that tested the ability and flexibility of governments, large and small companies, in addition to the banking and financial system, in dealing with the impact of the Coronavirus pandemic in general. With the continuation of the health measures taken by the government, including partial and total curfews, closure of land and sea borders, in addition to stopping air traffic to and from the State of Kuwait, and numerous other obstacles, many businesses have had to find ways to absorb losses. ABK, in coordination with the Central Bank of Kuwait and Kuwait Banking Association, from the onset of the pandemic, supported all initiatives set out to assist our clients through these extremely difficult times, which included a six month moratorium to corporate clients, and a six month repayment holiday on retail loans and interests thereof, including credit card repayments.
“We will continue to move forward with strong determination. We will focus on growth, adding sus-tainable Shareholder value, and making decisions that protect the operational performance of our business and the long-term viability of the Bank. I have full confidence in the Bank’s executive team to achieve this.”
George Richani, Group CEO, ABK, said, “While the negative impact of the COVID-19 pandemic on the Bank’s earnings is clear, ABK remains a well-capitalized, well-managed institution, that can withstand any future impacts. The management of repayment risk in this current environment is both prudent and necessary.
“Our International operations, especially Egypt, contributed positively to the Group’s total operating income, witnessing a 15 percent increase in spite of the challenging circumstances of COVID 19. Our DIFC branch continued to focus on developing its offshore banking capabilities making a valuable con-tribution to the Bank’s operating revenues.
“During 2020, the Bank’s prior investment in digital technologies enabled it to switch quickly to remote working and maintain the level of our services. Our customer-facing technology ensured customers were able to swiftly execute banking via our various electronic channels. We will continue adopting technology-powered processes and realign our operating model with a focus on efficient centraliza-tion and embedding synergies in our processes.”
“The robustness of our business and the resilience of our strategy means we are well positioned to embark on the recovery and growth journey in 2021.”
ABK has maintained strong investment grade ratings of A+ from Fitch and A2 from Moody’s, which re-flects the Bank’s strong fundamentals, including its capital position, resilient earnings capacity, stable funding, and diversification of liquidity sources.
The Bank remains unwavering in its commitment to human capital development, and was able to facili-tate employee training uninterrupted throughout the year, whilst ensuring adherence to social dis-tancing. Towards the end of 2020, the Bank hosted a virtual graduation ceremony for its 29th batch of ABK Academy students. ABK remains strongly committed to enriching Kuwait’s knowledge economy by hiring and developing Kuwaiti nationals and offering them fulfilling careers in the banking sector.
ABK continued its financial contributions to various causes throughout the year as part of the Bank’s social responsibility, including but not limited to donations towards the National Fund to fight COVID-19, Kuwait Fight Corona Fund, Kuwait Association for the Care of Children in Hospitals (KAACH), Kuwait Public Authority for Disability Affairs National Campaign and LOYAC. The Bank also led numerous in-ternal and external campaigns to re-emphasize the importance of adhering to health & safety measures set out by the Ministry of Health & the World Health Organization.
For more information kindly visit eahli.com or contact an ABK customer service agent via ‘Ahlan Ahli’ at 1899899.