Since its incorporation in 1952 as Kuwait’s first indigenous bank and the first shareholding company in the entire Gulf region, NBK has been known as ‘The Bank You Know and Trust’. Thanks to the recognized excellence of its very stable management along with its unequivocal strategy, consistent profitability, high asset quality and strong capitalization, NBK, throughout the years, succeeded in building an advanced banking institution that offers a full spectrum of innovative and unrivalled financial and investment services and solutions to individual, corporate and institutional clients. NBK enjoys a dominant market share with a large and ever-expanding local and regional clientele. NBK also boasts Kuwait’s largest overseas branch network spanning many of the world financial and business centers.
Vision & Mission
The NBK vision is to be the trusted bank of choice, building on our core values, people and expertise.
To deliver world-class products and the highest quality service to our customers.
To attract, develop and retain the best banking talent in the region.
To support the communities in which we operate.
To adhere to our core values of passion, integrity, conservatism and knowledge.
In following our mission, we believe that we will be able to achieve consistently superior returns to our shareholders.
The National Bank of Kuwait (NBK) was established in 1952 when a prominent Kuwaiti merchant went to the British Bank of the Middle East to open a letter of guarantee for the amount of 10,000 Indian rupees, (which is equivalent today to 750 KD). Much to his surprise, his request was rejected, on the condition that he provide a guarantor. This well-known merchant was shocked and appalled by the treatment that he had received, and news of this was all over town.
This incident gave rise to the question and the idea of having a Kuwaiti bank with a mission to serve citizens’ needs as its priority, stimulate the economic growth of the country, and look after the savings of its clients. In fact, a meeting was held with the late Amir of Kuwait, H.H. Sheikh Abdullah Al-Salem Al-Sabah, who congratulated them on the idea and promised them his complete support. An Amiri decree was issued on May 19, 1952 to open the National Bank of Kuwait, and NBK started operations on November 15th 1952.
The founders of NBK are:
• Khalid Zaid Al-Khalid
• Ahmed Saud Al-Khaled
• Khalifa Khalid Al-Ghunaim
• Khaled Abdullatif Al-Hamad
• Sayed Ali Sayed Sulieman Al-Rifai
• Yousef Abdulziz Al-Fulaij
• Yousef Ahmed Al-Ghanim
• Mohamed Abdulmohsen Al-Khorafi
• Abdulaziz Hamad Al-Sager
NBK was the first national bank in Kuwait and the entire Arabian Gulf region. All the board members and the founders of NBK were renowned merchants of Kuwaiti origin. NBK was established with a capital of 13,100 shares, each valued 1,000 Indian rupees – equivalent to 75 Kuwaiti dinars today. Over the years NBK has proved itself to be a financial leader in the Arab world.
Strong growth and inspiring future
On behalf of members of the board and myself, I present to you with pleasure the 63rd National Bank of Kuwait Annual Report. The report reviews the most important achievements of the Bank last year; which culminated in strong earnings and high returns to shareholders. It is a testament to NBK’s continued leadership, solid core business income streams, high asset quality trends, strong position in the domestic market and sustained cost controls. In 2015, NBK Group delivered very strong results, maximizing value for its shareholders.
Kuwait saw the implementation of several government mega projects in 2015, representing a new era of growth and development for NBK. As Kuwait entered a new phase of economic growth and development, NBK’s leadership in financing mega governmental projects strengthened the Bank’s position in the domestic market as the bank of choice for institutions and large corporates.
Meanwhile, NBK continued approaching regional markets as an integrated financial services provider, allowing the Bank to achieve further revenue synergies within the Group and reflect the strength of the Bank’s brand and reputation in the region and across the globe.
Strong Financial Performance and Growth
National Bank of Kuwait Group continued its strong performance during 2015, reporting a net profit of KD 282.2 million with a growth of 7.8% year-on-year. This result once again confirms the bank’s conservative strategy, prudent risk management and commitment to the highest standards across all business lines.
The 2015 results reflect the strong growth that NBK achieved across all business lines. Net operating income grew by 10.2% to KD 728.8 million. Loans and advances grew by 13.8% to KD 13.6 billion, reflecting the accelerated pace of government development projects’ implementation and the overall improvement in the operating environment. In turn, deposits grew by 7.1% to KD 12.1 billion, reaffirming the reputation of NBK as a trustworthy and safe bank.
NBK’s performance, strength and durability are reflected in all financial indicators. The Bank achieved strong returns on its assets and shareholders’ equity in 2015. Return on average assets reached 1.22% and return on average equity reached 10.5% as of 31 December 2015. Capitalization remained very strong with the Basel III Capital Adequacy Ratio reaching 16.8% at the end of December 2015, comfortably higher than the regulatory requirements.
NBK continued to improve its asset quality ratios with the NPL/Gross Loans ratio dropping to 1.34% as of yearend 2015 down from 1.50% a year earlier, and the NPL coverage ratio increasing to 322%, up from 276% at year-end 2014.
Total Group assets reached KD 23.6 billion, recording a growth of 8.3% year-on-year. In addition, total shareholders’ equity reached KD 2.6 billion, growing at 3.8% year-on-year.
NBK Board of Directors has recommended the distribution of a 30 fils cash dividend per share, representing 30% of the nominal share value. The board has also recommended the distribution of a 5% bonus share (five shares for every 100 shares owned) for the year 2015.
Highest rated and safest
NBK continues to enjoy one of the highest credit ratings in the MENA region and internationally with high ratings from Moody’s, Standard & Poor’s and Fitch Ratings.
Despite the downgrade of several ratings in the region due to economic and financial conditions, NBK maintained all its ratings. Moody’s affirmed NBK’s long term rating of Aa3, Fitch Ratings assigned NBK AA ratings and the Bank earned an A+ from Standard and Poor’s.
In recognition of NBK’s prestigious reputation, the Bank maintained its place among The World’s 50 Safest Banks list for the 10th consecutive time. NBK remains the only Kuwaiti bank on this list; a recognition that the Bank cherishes.
Mega projects gain momentum
During the year, the Kuwaiti government accelerated the pace of project awards and execution leading to a pickup in economic activity and credit growth. On the back of that, NBK continued to position itself to take advantage of growth opportunities highlighted by these projects as the premier bank of choice for both domestic and foreign corporates doing business in Kuwait. During the year, NBK provided support for all of the EPC contractors in Kuwait’s largest development project ever, the USD $13.2 billion KNPC Azzour Refinery Project, with their banking requirements. NBK also was chosen as the initial Underwriter and Mandated Lead Arranger in the USD $6 billion Equate syndication deal.
NBK also continued to build on the Bank’s strategic client relationships, making NBK the first choice for expansion plans and thus increasing the Bank’s market share. NBK landed several prominent deals including the role of Mandated Lead Arranger for the syndicated financing facility of USD $400 million for OSN, the region’s leading Pay-TV network. The syndicated facility included 11 international and regional banks, with NBK being the only Kuwaiti bank participating, a sound testament to NBK’s international reach and capabilities in handling sophisticated deals and building relationships with other international lenders.
NBK also participated in an award-winning syndicated facility for global logistics provider, Kuwait-based Agility. The syndicated facility won the “Corporate Finance Award” in the 2015 ACT Middle East Deals of the Year Awards for the impressive structure of the deal.
Those deals reflect the prestigious reputation of NBK and the high confidence that the Bank enjoys across the local, regional and international banking industries. It also reflects the Bank’s high status and position to benefit from growth opportunities on the back of the acceleration in the implementation of development projects in Kuwait.
Stability and solidity despite turmoil
International Banking Group (IBG) achieved a high rate of accomplishments since NBK launched its regional expansion strategy in the 1980s. The strong results achieved by foreign subsidiaries and branches reflect the success of NBK to diversify its sources of income and its successful regional and international expansion.
IBG profits increased its contribution to the Group, accounting for 27% of total group profits in 2015, in spite of the continuing operational challenges in several regional markets and the effect of lower oil prices in the GCC markets. Our operations in the GCC markets have proven their ability to withstand challenges and show promising growth prospects, especially in the Saudi and UAE markets.
One of the most prominent decisions taken by the Bank at the regional level was the decision to exit the Bank’s investment in International Bank of Qatar (IBQ). The Bank concluded the sale of its 30% stake in IBQ during the first quarter of 2015 as the potential to increase its share to a controlling stake diminished. The exit was very smooth and the Bank achieved strong returns from its investment. The Qatari market is still of interest, however the exit aims to enhance NBK’s ability to seize new opportunities in the Qatari market through alternative channels.
The Egyptian market remains a key strategic market for NBK. The Bank is realistically optimistic about the positive prospects the Egyptian market offers, in addition to promising opportunities for growth after the return of stability in the country. The Bank rebranded Al Watani Bank of Egypt to NBK-Egypt furthering integration and unification at the Group level. We believe that NBK-Egypt will continue to deliver strong performance as the political situation stabilizes and view Egypt as a long-term growth market.
Boubyan Bank represents a key component in our domestic strategy. Since turning Boubyan Bank into a fully consolidated subsidiary of NBK Group in 2012 with a 58.4% ownership, the Bank has successfully achieved profitable targets and is the fastest growing bank among all Kuwaiti banks. Boubyan Bank will continue providing NBK Group with a market advantage in Kuwait as the only bank domestically with access to both conventional and Islamic banking.
Boubyan Bank is witnessing a steady increase in market share year after year and achieving growth in all business aspects. Boubyan Bank will continue conveying NBK’s culture in following a conservative strategy and customer-centric focus on products and services. NBK plans to continue with full commitment to Boubyan Bank to further strengthen its market position among domestic financial institutions and increase its contribution to the Group while maintaining the independence of both banks.
Risk management and governance
Despite the significant challenges posed by political, economic and social upheavals, regionally and locally, National Bank of Kuwait was able to continue its strong performance and to grow at a stable pace thanks to a conservative strategy rooted in the Bank’s culture and leadership and the Bank’s commitment to strict corporate governance standards.
Through a proven track record that stretches for more than six decades of stability, reliability and expert leadership, the Bank has weathered recent regional and global financial crises with resiliency. The National Bank of Kuwait continues its commitment to the principles of transparency, accountability and protection of shareholders’ rights as an integral part of the Bank’s culture and philosophy.
In 2015, NBK successfully concluded the issuance of USD 700 million additional Tier 1 securities and the issuance of KD 125 million Subordinated Tier 2 bonds. Both issuances saw significant interest as they attracted two times coverage, underlying the credit strength of NBK. The issuances are the first in the MENA region that carry an investment grade rating from an international rating agency (Moody’s). The issuances aim to strengthen NBK’s capital base in accordance with the Central Bank of Kuwait (CBK) requirements under its Basel III framework. Capital Adequacy Ratio reached 16.8% as of end-December 2015 under the Basel III regime, which is comfortably higher than regulatory requirements.
There is no doubt that NBK gains strength primarily from its human resources. For that, NBK is proud to be one of the largest employers of Kuwaiti nationals in the private sector.
During 2015, the Bank affirmed its investment in the development of human wealth. NBK hit an all-time high rate with its Kuwaitization program to localize and increase the national employment rate; the Bank hired about 300 Kuwaiti citizens in 2015, achieving a market-leading Kuwaitization rate of 66% of NBK’s workforce.
As part of NBK’s policy to develop the skills and capabilities of staff, the Bank provided more than 1,300 training opportunities to develop all employee requirements to become effective in their roles. The Human Resources Group also partnered with several academic institutions and universities like Harvard and the American University of Beirut to develop NBK’s young future leaders to ensure the continuity and sustainability of the Bank.
Absolute commitment to CSR
Confirming its commitment to corporate social responsibility, NBK didn’t spare any effort in supporting charitable, educational, humanitarian and social activities. The NBK Children’s Hospital remains an icon of the Bank’s social contributions. The Bank continued with its commitments by establishing the first specialized center for marrow transplantation in Kuwait in the Children’s Hospital. The move aims to complement the ongoing development of the hospital which was inaugurated in 2000 as the first specialized hospital for the treatment of children suffering from various forms of cancer. Moreover, the Bank continued to support various charities and humanitarian organizations such as Bayt Abdullah Children’s Hospice, the Kuwait Red Crescent and LOYAC.
For more than two decades, NBK continues its Ramadan Iftar campaign as well as the continuous commitment and support for activities aimed at protecting and preserving the environment, supporting education and sports activities like NBK’s Annual Walkathon.
Thanks and appreciation
Finally, on behalf of the board and executive management of the Bank, I would like to profoundly thank the authorities for their continued support of Kuwait’s economic stability and growth. We are also deeply indebted to the Central Bank of Kuwait for its continued leadership, support and guidance.
We would like to thank our shareholders and customers for their continued support of and belief in NBK as the leading Kuwaiti bank and a top financial institution in the region.
We also very much appreciate the dedication of our executive management team and their continued leadership. We would also like to thank our dedicated employees for their hard work and professionalism. NBK deeply believes that our human capital is the greatest source of our wealth and success and we will continue to develop it to ensure a bright and profitable future.
Nasser Musaed Abdulla Al–Sayer
Chairman of the Board of Directors
Board Of Directors
Mr. Nasser Musaed Al-SayerChairman
Mr. Ghassan Ahmed Al-KhalidVice Chairman
Mr. Hamad Abdul Aziz Al-SagerBoard Member
Mr. Yacoub Yousef Al-FulaijBoard Member
Mr. Hamad Mohamed Al-BaharBoard Member
Mr. Muthana Mohamed Ahmed Al-HamadBoard Member
Mr. Haitham Sulaiman Al-KhaledBoard Member
Mr. Loay Jassim Al-KharafiBoard Member
Mr. Emad Mohamed Al-BaharBoard Member
Mr. Isam J. Al-SagerGroup Chief Executive Officer
Ms. Shaikha K. Al-BaharDeputy Group Chief Executive Officer
Mr. Salah Y. Al-FulaijChief Executive Officer – Kuwait
Mr. Sulaiman Barrak Al-MarzouqDeputy CEO - Kuwait
Mr. Georges RichaniGeneral Manager – International Banking Group
Mr. Jim MurphyGroup Chief Financial Officer
Mr. Parkson CheongGroup Chief Risk Officer
Mr. Mustafa El-GendiGeneral Manager – Corporate Banking Group
Mr. Pradeep HandaGeneral Manager – Foreign Corporate, Oil and Trade Finance Group
Mr. Suresh BajpaiGeneral Manager – Consumer Banking Group
Mr. Malek KhalifeGeneral Manager – Private Banking Group
Mr. Emad Al-AblaniGeneral Manager – Group Human Resources
Mr. Dimitrios KokosioulisGeneral Manager – IT & Operations Group
Mr. Carl AingerGroup Chief Internal Auditor
Dr. Soliman Abdel-MeguidGeneral Counsel – Head of Legal Affairs Group
Dr. Elias BikhaziGroup Chief Economist Economic Research
Awards & Recognition
2009 - 2016
World’s Top 50 Safest Banks for 11 consecutive times
2010 – 2013, 2015
Best Emerging Market Bank in the Middle East
2010 – 2016
Best Emerging Market Bank in Kuwait
Best Private Banking in Kuwait
Best Bank for Financial Risk Management Middle East
2008 - 2017
Best Trade Finance Bank in Kuwait
2013, 2015 - 2017
Best Foreign Exchange Provider in the Middle East
2013 - 2017
Best Foreign Exchange Provider in Kuwait
Best Provider of Money Markets Fund in the Middle East
Best Bank in Kuwait
1994 – 2017
Best Bank in Kuwait
2007, 2008, 2010, 2011, 2013
Best Bank in the Middle East
Best Managed Company in the Middle East
2006, 2009, 2015 - 2017
Best Private Banking in Kuwait
Best Investment Bank in Kuwait
Outstanding Contribution to Middle East Banking
2007, 2008, 2010, 2011, 2013, 2015, 2016
Bank of The Year - Kuwait
2007, 2008, 2010, 2011
Bank of The Year - Middle East
Best Customer Service and Project Finance in the Middle East
2007 - 2009
Best Deal of the Year in the Middle East
2001, 2002, 2004, 2005, 2007
Best Deal of the Year in Kuwait