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ABK Announces Operating Profits of KD 87.3 Million and Net Profits of KD 30.4 Million for 2015

February 11th 2016

Al Ahli Bank of Kuwait (ABK) today announced Operating Profits of KD 87.3 Million for 2015, up 5.8% from last year. Operating Income also saw a 9.3% jump to KD 128.5 Million, while net loans and advances to customers increased by 25.8% over the same period, underlining the Bank’s strong growth momentum.

Net Profits, however, were down 19.2%, from KD 37.6 Million to KD 30.4 Million, following aggressive precautionary provisioning on the Kuwait book (KD 28 Million for the 4th Quarter and total provisions of KD 61.4 Million for 2015) to reflect the current market volatility and depressed asset prices. ABK will continue its conservative policy of provisioning during 2016.

The Group’s total assets at year-end increased by 24.6% to KD 4.36 Billion, while customer deposits were 28.8% higher at KD 2.50 Billion. Shareholders’ equity amounted to KD 556 Million, and the Group achieved a return on equity of 5.5%, with earnings per share of 19 fils.

The major event of the year was the successful acquisition of a 98.5% stake in Piraeus Bank of Egypt (PBE). This acquisition represents a key milestone for the Bank. It also generated an extraordinary net one-off gain of KD 8 Million (Note that Operating Profits would have been KD 95.3 Million had ABK included this gain relating to the acquisition of Piraeus Bank of Egypt). PBE provides banking services to its customers in corporate banking, retail banking, treasury, as well as leasing products through a fully-owned subsidiary. It operates 39 branches and contributed KD 428 million to the total assets of the Group.

Mr. Talal Behbehani, ABK’s Chairman, said: “This year has been a very special year as it recorded a key milestone in the Bank’s history with the acquisition of Piraeus Bank – Egypt. This represents a major step towards the Bank expanding its presence across the MENA region. ABK is now the second Kuwaiti bank operating in Egypt.

“This is a good set of results, which show continuous improvements, while our top-line organic growth continues to accelerate. Consequently, the Board has proposed a cash dividend of 10 fils, subject to approval by the Bank’s Annual General Meeting and financial regulators.

“The Bank’s strong position was reaffirmed by Fitch, one of the world’s leading credit rating agencies. Fitch issued an update in November confirming the Bank’s stable outlook and its long term Issuer Default Rating (IDR) of A+. This confirmation of the Bank’s solid position is an endorsement of our strategy and will help us to continue our growth in the future.

“In closing I would like to recognize the Bank’s management team and all ABK employees for their hard work and commitment. They are what differentiates us and makes us unique.”

ABK’s CEO, Michel Accad, said: “The underlying progress of the Bank during the course of the year has been excellent, despite making further precautionary provisions on the Kuwait book, which is only prudent in the current economic climate. We owe a great deal of our success to the customer-focused strategy we have adopted, which has allowed us to deliver the highest service standards and provide customer experiences designed to make our clients’ lives easier and simpler. We will continue to invest in our infrastructure and systems, and we will further develop our ‘Simpler Banking’ concept, in line with the Bank’s vision of “Reimagining a Simpler Bank” and its Core Values of Transparency, Integrity, Simplicity and Excellence.

“I believe that the combination of ABK’s customer-focused strategy and diversified business model is one that will both meet the needs of our customers and create long-term value for our customers and our shareholders.”

In 2015 the Bank received a number of significant industry awards, which include: the Banker Middle East award for Best Retail Bank; Asian Banker award for Most Improved Retail Bank in the Middle East; Best Retail Bank from ‘The European – a Thomson Reuters Affiliate; Best Loyalty Program in Kuwait, Banker ME; Elite Quality Recognition Award from JP Morgan Chase; Best New Product Award from Visa International; and the Award for Excellent Quality from International Commerzbank AG.