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Kuwait: Al Bahar Highlights AI as a Key Enabler Driving Banking Growth and Empowerment
31.10.2024The Future Investment Initiative (FII) held in Riyadh hosted a panel discussion on the rapidly evolving financial landscape, the crucial roles of traditional banks, AI, and FinTech in defining the future of the banking industry. Shaikha Al-Bahar, Deputy Group CEO of National Bank of Kuwait (NBK), participated in the panel discussion, offering her valuable insights.
The panel discussion themed “Can Traditional Banks Compete with AI and Fintech Disruptors?", included leading international figures from financial services and technology, explored the challenges and opportunities that AI, FinTech, and traditional banks face as they seek to coexist—or outcompete—in the digital age. In a world where financial technology is changing the rules of the game, Shaikha Al-Bahar provided brilliant insights into how NBK is not only keeping pace with these innovations but also leading the charge.
Redefining the Banking Landscape
"Fintech has been labeled a 'revolution' in banking, but the data tells a more nuanced story," Shaikha Al-Bahar opened the discussion. "Despite billions of dollars in investments, not a single FinTech company ranks among the top 250 global banks. The reality is that FinTech isn't a revolution that will replace traditional banking. Rather, it challenges us to evolve."
Al-Bahar pointed out that, contrary to popular belief, the banking industry's business model has proven remarkably resilient, withstanding multiple disruptions over the past decade. She emphasized that traditional banks, including NBK, are integrating new technologies to enhance rather than replace core banking functions.
"The progress we've seen from the digital era isn’t about FinTech replacing us," she continued. "It's about integrating digital innovations into a more comprehensive and inclusive business model. At NBK, our digital transformation allows us to build on the solid foundation of traditional banking while leveraging technology to enhance customer experiences."
Collaboration vs. Competition: Banks and FinTechs in the New Financial Ecosystem
The panel discussed whether traditional banks and FinTech companies are destined to compete or collaborate. Al-Bahar argued that the future of banking will be defined not by head-to-head competition, but by cooperation.
"Banks and FinTechs have historically competed for customers, but we are entering an era of collaboration," she remarked. "Traditional banks have the financial capacity, while FinTechs have agility and innovation. The key is finding the right balance between these strengths. It's not about one outdoing the other, but about leveraging each side’s advantages."
As a case in point, Al-Bahar referenced NBK’s own digital bank, Weyay. "We at NBK operate both our traditional bank and Weyay, a fully digital bank. Both operations complement each other and interact seamlessly, providing a unique, customer-centric journey. That is the real revolution in banking."
Navigating the Balance of AI within Banking Frameworks
As the panel discussion shifted to the role of AI, the conversation turned to the immense potential and risks associated with artificial intelligence in the financial industry. Banks have already invested billions in AI-powered systems for fraud detection and risk management, but concerns remain about whether AI might introduce new vulnerabilities into the system.
"AI is a great enabler—it allows banks to analyze vast amounts of data, recognize patterns, and simulate scenarios," Al-Bahar explained. "But while AI enhances our capabilities, we must ensure that it does not make us complacent. Human oversight is critical. Technology recommends, but humans must decide."
Al-Bahar highlighted the importance of transparency and accountability in AI systems, stressing that while AI can provide powerful insights, banks must ensure that these insights are based on real, verifiable data. She cautioned against an overreliance on AI, noting, "We cannot let AI be the sole decision-maker. It’s crucial to have a pilot behind the wheel, to monitor, review, and intervene when necessary."
Transforming Banking from the Inside
While much of the FinTech discussion focuses on customer-facing applications, Al-Bahar offered a compelling argument that the true potential of AI lies behind the scenes—in back-office operations, regulatory compliance, and capital allocation.
"At NBK, we’ve automated over 100 processes using Robotic Process Automation (RPA), and the results have been remarkable. AI and machine learning don’t just make processes more efficient; they redefine them, allowing us to be more responsive and dynamic."
She noted that AI could revolutionize risk management by continuously learning from new data points and adjusting risk profiles in real-time. This, she believes, is where AI’s most transformative impact will be felt in banking—areas where rule-based, data-driven tasks can be optimized for greater accuracy and speed.
The Balancing Act Between Regulation and Innovation
The panel also addressed the complex relationship between innovation and regulation. In a rapidly evolving industry, governments are struggling to keep pace with technological advancements. Al-Bahar argued that regulators are playing a crucial role in safeguarding the financial system while supporting innovation.
"Regulators have been quick to recognize the importance of digital technologies in banking," she said. "Many have created 'sandboxes'—safe environments for testing new FinTech solutions. However, I believe regulators' primary role should remain that of protectors of the financial system. Banking is highly regulated for good reason—its role in the global economy is critical, and any disruptions can have far-reaching consequences."
Embedded Finance: Will the Bank Brand Become Irrelevant?
Another intriguing topic was the rise of embedded finance—the integration of banking services into non-banking platforms. With more companies offering financial services through digital ecosystems, some have predicted that "bank as a brand" may become obsolete. Al-Bahar was quick to point out that traditional banks still have a vital role to play.
"This new model works well on a smaller scale—like payment wallets and transfers—but banks will remain the backbone of the financial system. Embedded finance is just another example of how the industry is evolving to meet changing customer demands. Banks will need to adapt by developing their own technologies or partnering with FinTechs to provide these services."
She also pointed out that some digital banks are reverting to traditional models, opening offline branches and offering human-based customer service to enhance growth—a sign that even FinTech leaders recognize the value of traditional banking services.
Leading the Change Through A Holistic Approach to Innovation
Finally, the panel addressed the leadership challenge facing traditional banks. Al-Bahar argued that to remain competitive in an era of rapid technological change, banks must go beyond simply investing in technology—they must transform their organizational culture.
"Industry leaders need to foster a culture of innovation that permeates the entire organization. It’s not just about adopting digital technologies, it’s about aligning every decision-making process with a digital mindset, from junior staff hires to strategic planning at the executive level."
Al-Bahar also emphasized NBK's leadership in digital transformation, expressing immense pride in the bank's accomplishments.
“Our journey towards integrating digital technologies while preserving the stability and trust of traditional banking is a testament to our commitment to providing the best for our customers," Al-Bahar noted.
Looking forward to 2030, Al-Bahar concluded with a bold prediction: "The CEOs who strike the right balance between traditional banking and Fintech agility will define the future of the industry. Success will depend on being able to adapt, innovate, and evolve—without losing sight of the core values that have made traditional banking such a pillar of the global economy."
Kuwait: NBK Signs Four Strategic Agreements Valued at $1.6 billion at the FII 8th Edition
30.10.2024National Bank of Kuwait (NBK) is proud to announce the signing of several landmark agreements on the sidelines of the prestigious 8th Edition of the Future Investment Initiative (FII), with a total value of SAR 6.2 billion (approximately $1.6 billion). These agreements underscore NBK’s commitment to playing a pivotal role in contributing to Saudi Arabia’s Vision 2030, as the bank continues to expand its presence across the Kingdom. By partnering with leading industry players, NBK strengthens its reputation as a trusted financial partner dedicated to supporting the Kingdom’s ambitious economic transformation and infrastructure development.
The signing ceremony was attended by Mrs. Shaikha Al-Bahar, Deputy Group CEO of National Bank of Kuwait, Mr. Zaid Isam Al-Sager, Deputy CEO - International Banking Group, Mr. Meshari Hamad Bin Salamah, Deputy General Manager, Head of International Corporate & Commercial Real Estate, International Banking Group at NBK, Mr. Anas AlUbaid, General Manager of NBK -KSA, and Mr. Qais Al-Ateeqi, Unit Head - MENA Corporate Banking at NBK.
These strategic partnerships, which span various sectors ranging across financial leasing, infrastructure development, and energy projects, highlight NBK’s proactive approach in driving sustainable growth and fostering key collaborations. With a deep understanding of Saudi Arabia's evolving economic landscape, NBK tailors its innovative financing solutions to align with the national agenda. The bank’s long-standing commitment to the region, combined with these high-impact agreements, not only reinforces NBK’s market position but also enhances its contribution to the Kingdom’s infrastructure development goals.
Strategic Partnerships
Among the agreements reached, NBK has signed a Framework Agreement with ACWA Power, valued at SAR 2.6 billion (approximately $690 million). This strategic partnership is designed to support ACWA Power’s ongoing expansion initiatives within Saudi Arabia and beyond. ACWA Power is the world’s largest private water desalination company, the first mover into green hydrogen, and a leader in energy transition. The company operates in 13 countries across the Middle East, Africa, Central Asia, and Southeast Asia. NBK is committed to facilitating ACWA Power’s efforts to address the increasing energy and water resource demands of the MENA region, reinforcing its dedication to sustainable development and innovation in these critical sectors.
In addition, NBK has established a Credit Facility Agreement with AlGihaz Contracting Company valued at more than SAR 1.8 billion (approximately $480 million). This agreement aims to bolster AlGihaz’s working capital requirements as it continues to deliver critical infrastructure projects. Specifically, NBK is financing one of three contracts that Al-Gihaz is utilizing to support it with executing on the development of the world’s largest energy storage project in the Kingdom, with a capacity of up to 7.8GWh. With over 45 years of experience, AlGihaz is a specialized contracting company renowned for its engineering, design, and construction capabilities.
Furthermore, NBK signed a Credit Facility Agreement with the Pan-Kingdom Holding Group, including Saudi Pan-Kingdom Company (SAPAC) and Pan-Kingdom Real Estate (PKRE), amounting to over SAR 1 billion (approximately $267 million). This agreement is intended to support the group’s working capital and investment needs. With more than 30 years of experience, Pan-Kingdom Holding Group operates across various sectors, including construction, manufacturing, operation and maintenance (O&M), transportation, water, real estate development, investment, among other activities, thereby driving the Kingdom’s economic growth and advancing its strategic development goals.
Lastly, NBK signed a Credit Facility Agreement with Alyusr Leasing and Financing Company totaling SAR 750 million (approximately $200 million). This partnership aims to enhance Alyusr’s financing activities to meet the increasing demand in the Kingdom. Alyusr is a leading financing and leasing company licensed by the Saudi Central Bank, specializing in consumer and commercial financing.
Commitment to Strategic Development
NBK’s IBG has developed a strong presence in the region, with a team of over 300 seasoned corporate bankers across 11 countries. In Saudi Arabia, NBK has established a strong corporate banking footprint with over 30 corporate bankers, collaborating with some of the Kingdom’s largest and most reputable clients across both the government and private sectors.
As a key player in the financial landscape of the Kingdom, NBK is dedicated to facilitating economic growth and diversification in line with Vision 2030. The bank’s agreements with key local and international players underscore its commitment to supporting major infrastructure and energy projects that will shape the future of Saudi Arabia.
International Banking Group: A Pioneer in Global Expansion
National Bank of Kuwait's (NBK) International Banking Group (IBG) stands as a testament to the bank's commitment to serving its customers beyond local borders. Established as the first national bank in the GCC and one of the first regional banks to expand internationally, NBK initiated its international expansion in the early 1980s. This strategic move marked the beginning of a journey that has since seen the Group extend its reach to 13 countries across four continents, with coverage extending to 50 countries across the world.
NBK employs over 6,000 staff globally, reflecting its diverse operations across Asia, Europe, North America, and the Middle East. The Group's journey in Saudi Arabia commenced in 2006 with a single branch operation in Jeddah, which has since expanded to three branches in Jeddah, Riyadh, and Khobar.
IBG, which comprises overseas branches and subsidiaries, serves as a vital pillar of NBK Group's growth. The strength of this network is reinforced by the Group’s regional and international expertise, alongside a steadfast commitment to maintaining the highest banking standards. With a focus on enhancing customer experience, IBG is dedicated to generating substantial value for its clients.
The Group's international operations play a critical role in bolstering NBK Group's revenues. In the first half of 2024, these operations contributed 24% of the Group’s net operating income, 23% of profits, and an impressive 40% of total assets. These figures highlight the robustness of the Group's operational performance and underscore the success of its diversification strategy.
As NBK continues to expand its international footprint, IBG remains integral to its mission of providing exceptional financial services and innovative solutions to clients around the globe.
Through this strategic international approach, NBK is well-positioned to navigate the complexities of the global financial landscape while delivering unparalleled value to its customers.
Kuwait: Al Bahar: Reforms to Foster a Robust Economy with Increased Private Sector Participation in Line with Kuwait Vision 2035
30.10.2024Shaikha Al-Bahar, Group Deputy CEO of National Bank of Kuwait, conveyed optimism about the robust outlook for Kuwait’s economy and anticipated improvements in the business environment in the near term. She highlighted that a stable political climate is expected to positively influence decision-making, thereby accelerating government spending on infrastructure projects.
In an interview with Bloomberg TV on the sidelines of the Future Investment Initiative (FII) conference in Riyadh, which launched yesterday, Al-Bahar stated, "With the National Assembly dissolved, decision-making now rests solely with the government, streamlining the process. We see that the government is genuinely committed to advancing economic reforms and launching mega projects, particularly in infrastructure, which will positively impact Kuwait’s economy."
Al-Bahar highlighted the notable surge in project awards recently, noting that approximately $6 billion worth of projects have been awarded in 2024, with an additional $5 billion expected to be awarded in the near term. This activity opens up opportunities for both international and local companies, stimulates the lending environment, and drives overall market growth.
Al-Bahar emphasized that the reform trajectory is on the right track, paving the way for a real economy and significantly expanding opportunities for private sector contributions. These efforts align with Kuwait’s Vision 2035, which prioritizes private sector participation in driving economic development.
IPOs
Al-Bahar highlighted the momentum in Kuwait's IPO and listing market, stating, "We are now witnessing a framework for Public-Private Partnership (PPP) projects, with companies emerging from these collaborations moving towards initial public offerings and stock exchange listings. This approach will contribute to enhancing capital market activity."
"I believe that many family businesses will opt for listing, driven by their interest in establishing better governance and clearer strategic direction." Al-Bahar added, expressing optimism about increased activity in family business listings, given the positive climate in Kuwait.
Boubyan and Gulf Bank
Commenting on the ongoing merger discussions between Boubyan Bank and Gulf Bank, Al-Bahar stated, "As the largest shareholder in Boubyan Bank, NBK supports this initiative. However, our endorsement is contingent upon the merger providing added value for our shareholders. A final assessment of the transaction’s viability will follow the recently initiated due diligence process."
Al-Bahar also highlighted that NBK holds a unique position among Kuwaiti banks by offering both conventional and Islamic banking services, aiming to further expand its Islamic banking offerings through Boubyan Bank.
Navigating a Lower Rates Environment
Al-Bahar emphasized that while the downward trend in interest rates presents challenges for banks profitability, it also stimulates increased borrowing, particularly by large corporations amid expanding business activities. This uptick in borrowing could help to counterbalance the pressure on bank earnings created by the low-interest rate environment.
The Saudi Market
Al-Bahar highlighted NBK’s strategic interest in the Saudi market, emphasizing that NBK, as a global bank with a strong presence in diverse markets, is currently concentrating on the GCC region—particularly Saudi Arabia, which stands out as one of the most significant growth markets for NBK Group’s international operations.
She noted that NBK caters to a wide range of sectors within the Saudi economy, serving government-related entities, large corporations, and family-owned businesses. Additionally, the bank has established robust relationships with numerous clients across various sectors in the Kingdom.
Al-Bahar emphasized that NBK Group is actively pursuing the growth of its wealth management business in the Kingdom through NBK Wealth. The bank is also focused on expanding its offerings to clients by introducing a range of funds and other wealth management services.
Furthermore, she highlighted that NBK is actively engaged in this year's edition of the FII taking place in Riyadh, represented by a significant delegation. Throughout the conference, the delegation held numerous meetings and successfully concluded several financing agreements with prominent Saudi companies across various sectors, underscoring the bank's strong commitment to supporting Saudi Vision 2030.
Besides the Saudi market, NBK is also focused on the Egyptian market, which is one of the Group's key growth areas.
Geopolitical risks
On the topic of geopolitical risks and their implications for the economies of the GCC region, Al-Bahar remarked that these challenges are not unfamiliar to the area. She underscored that, despite the increasing tensions, the macroeconomic impacts have predominantly remained confined to the countries directly engaged in the conflict.
Al-Bahar highlighted that the circumstances for GCC countries are unique, as they consistently demonstrate resilience in navigating crises, particularly through government support provided to various economic sectors during challenging times.
She referenced the support provided by the Government of Kuwait during the COVID-19 crisis, which involved postponing and easing restrictions for banks and SMEs. She also highlighted the enactment of legislation to guarantee bank deposits during the global financial crisis of 2008.
Kuwait: NBK Concludes its Participation in the Annual Meetings of IMF and the World Bank Group
28.10.2024The official delegation representing National Bank of Kuwait (NBK) has concluded its participation in the annual events and meetings organized by the Board of Governors of the International Monetary Fund (IMF) and the World Bank Group, which took place in Washington, D.C. from October 21st to 26th.
The delegation was headed by Mr. Isam Al-Sager, Vice Chairman and Group CEO, alongside Mr. Omar Bouhadiba, CEO of International Banking Group, and Mr. Nassif Chehab, Head of Financial Institutions Division, as well as Mr. Rani Selwanes, General Manager of NBK - New York.
The Annual Meetings discussed key economic and financial challenges in addition to various topics including public debt, fiscal sustainability, and economic growth, climate finance, scaling up climate finance. Furthermore, the meetings tackled international trade issues and the impact of geopolitical tensions on the global economic landscape.
On the sidelines of the IMF Meetings, NBK’s delegation conducted numerous bilateral meetings with high-ranking international officials, which focused on addressing key current challenges in the global banking and financial industry.
The delegation also joined the reception ceremony hosted by Kuwait Banking Association (KBA) last Friday in Washington, D.C., under the patronage of Mr. Basel Al-Haroon, the Governor of the Central Bank of Kuwait. The event was attended by Mrs. Noura Al-Fassam, Minister of Finance, Minister of State for Economic Affairs and Investment, and Acting Minister of Oil, and Sheikha Al-Zain Al-Sabah, Ambassador of Kuwait to the United States, along with governors of Arab central banks, chairmen of Kuwaiti banks, Kuwaiti banking leaders, and a number of international economic and financial personalities.
The event featured interactions between bankers from Kuwait and their counterparts from Arab and foreign regions, facilitating discussions on the latest financial and banking developments and the exploration of potential collaborations in the fields of finance and investment.
NBK’s delegation also joined the dinner banquet hosted by Sheikha Al-Zain Al-Sabah, Ambassador of Kuwait to the United States, attended by Mrs. Noura Al-Fassam, Minister of Finance, Minister of State for Economic Affairs and Investment, and Acting Minister of Oil, and Mr. Basel Al-Haroon, the Governor of the Central Bank of Kuwait, along with Kuwaiti banking leaders.
One of the significant highlights of this year's meetings for the official bank delegation was their participation in a symposium organized by the G30, held concurrently with the annual meetings of the IMF and the World Bank Group. Every year, central bank governors from around the world convene with industry leaders and academic experts at a symposium focused on addressing the most pressing financial and systemic challenges facing the global central banking community.
The bank's delegation also took part in meetings organized by the Institute of International Finance (IIF), where a range of topics were discussed. These discussions covered global challenges, including interest rate reduction cycle, financial markets volatility, global geopolitical tensions, and strategies aimed at bolstering the resilience of the banking industry while fostering sustainable and broadly inclusive economic growth.
The IMF and the World Bank Group Annual Meetings brought together governors of central banks, ministers of finance and development, parliamentarians, private sector executives, civil society, and academics to discuss issues of global concern. These meetings encompass a wide array of activities, including seminars, regional briefings, press conferences, and numerous other events dedicated to addressing topics related to the global economy, international development, and the global financial system.
The 2024 Annual Meetings also covered a range of key topics including the strategies for establishing economic resilience in the face of a weak global economy and heightened uncertainty. Policymakers explored ways to build a more resilient future by reinforcing social safety nets to safeguard the most vulnerable segments of society, enhancing governance and accountability, strengthening policy frameworks, and addressing the challenges posed by climate change.
The Annual Meetings feature several significant committees, with the most notable ones being the Development Committee, the International Monetary and Financial Committee (IMFC), the Group of Ten, the Group of Twenty-Four, and the Group of Thirty. The IMFC meeting, in particular, tackled evaluating the current state and potential future trends in the global economy's performance, as well as examining developments in international financial markets and the types of risks that could impact these performance trends.
During its Annual Meetings, the International Monetary Fund conducted a comprehensive assessment of the global economic outlook. This review encompassed the insights IMF’s experts regarding trends in the global economic performance, expected risks, and the prospects of the world economy.
Kuwait: Al-Sager: Kuwait on the Right Track to Drive Economic Growth
27.10.2024Mr. Isam Al-Sager, Group Vice-Chairman and CEO of National Bank of Kuwait (NBK) stated that the Group’s net profit growth remains mainly driven by core banking business.
In his interview with Al Arabiya TV, on the sidelines of the Annual Meetings of the International Monetary Fund (IMF) and the World Bank Group (WBG) in Washington, D.C. joined by NBK, Al-Sager mentioned: “NBK posted strong net interest income growth for 9M2024 on the back of growth in volumes, relatively higher interest rates, and operating efficiently to control operating costs and cost of risk.”
“Our net interest income for the nine-months period reached KD 733.7 million, boosting by 10.2% over 2023, whereas net operating income reached KD 931.0 million, growing by 7.8% year-on-year.”
“The cost of risk was 34bps during 9M2024, mainly resulting from lower credit loss and impairment provisions, while remaining committed to our conservative approach in managing credit exposures,” he noted.
“As regards asset quality, NPL ratio generally improved to reach 1.39% of total credit portfolio as at end of December 2024, whereas loan loss coverage ratio increased to 263%,” he added.
Lower interest rates
On the impact of the rate cut cycle on banks' net margins during 4Q2024 and next year, Al Sager said, “It is true that margins come under pressure with low interest rates, but we must keep in mind that the increased volume of business activities resulting from the low interest rate environment may offset these pressures, as the declining rates will encourage lending, especially by large corporates.”
“NBK is hedging against interest rate movements through its diversified business model and increased focus on fee business, and we expect net margins for 2024 to be largely stable, probably a few basis points higher than last year's levels,” he explained.
“As for 2025, the frequency and size of rate cuts globally remains uncertain, and its impact will be felt more clearly in the coming quarters,” he added.
On a question about the possibility of a change in demand for lending due to the declining lending cost, Al-Sager replied: “For corporate lending, lower interest rates are expected to support credit growth, but this is also conditional on a favorable macroeconomic and business environment and accelerated project awards, which combined will provide a greater momentum for private sector lending. On the retail side, we expect to see a gradual increase in demand for retail loans with each rate cut.”
Saudi Market
On NBK’s operations in Saudi Arabia, Al-Sager emphasized that Saudi Arabia as a key and strategic market for the Group’s international operations where we offer our services to diverse clientele that includes GREs, large corporations, and family-owned businesses.
“The Group seeks to increase its presence in the wealth management business through NBK Wealth, in addition to expanding its offerings to customers through funds and other wealth management services.
As regards NBK's targets and growth expectations in Saudi Arabia, Al-Sager said that they will be in line with the bank's conservative approach, noting that NBK has been present in the Saudi market for a long time and serves large corporations and GREs, which align with the Group’s conservative approach and risk management practices.”
“We operate currently in KSA through 3 branches, in Riyadh, Jeddah and Eastern Province and target further expansion in the Saudi market.”
On a question about whether NBK- KSA intends to expand in the Saudi market through acquisitions, Al-Sager said, “Whenever we have a suitable acquisition opportunity, we will consider it seriously. We are not looking for acquisitions for the sake of acquisitions, but we seek opportunities that maximize returns for our shareholders.”
Egyptian Market
As for the Egyptian market, Al-Sager said that it is currently stable, which proves NBK's optimism about the market's huge potential and promising opportunities.
“The Egyptian economy has recently benefited from the reforms aiming to attract more foreign inflows and the government's closing of several foreign investment deals, which restored confidence in the economy and the Egyptian currency,” he explained.
Regarding NBK-Egypt, Al-Sager stated, “We maintain a very healthy loan portfolio in terms of asset quality, while the cost of risk at the end of 1H2024 in Egypt was below 1% (0.56% exactly), and NPL to total loans ratio stood at 1%. So, at this stage, we are not concerned about the credit quality of our loan portfolio in Egypt.”
“Our operating performance in Egypt remains among the most profitable locations for the Group with promising returns, while NBK-Egypt seeks opportunities to grow its contribution to the Group, which stands at around 5% of total assets and profits,” he highlighted.
Boubyan and Gulf Bank Merger Negotiations
On the merger negotiations between Boubyan Bank and Gulf Bank, Al-Sager said, “As the majority shareholder in Boubyan Bank, we are supportive of the discussions. But our support is not unconditional, like all our previous transactions historically, we should find shareholder value creation in this transaction.”
“So far, the potential transaction makes sense from a strategic point of view as it is in line with NBK Group's diversification agenda and strengthens its position in the local market by expansion in Islamic banking through Boubyan Bank.”
“There are steps that have started recently such as the due diligence process, and there is a long list of regulatory and market requirements, and once these are completed, we will be able to reach a final assessment of the feasibility of the transaction,” he continued.
Project Awards
Al-Sager said he is optimistic about the business environment and the project award market in Kuwait, especially in light of the strong activity witnessed by the project market during the third quarter of this year compared to the recent past years, expecting this momentum to continue in the remainder of 2024 as well as into 2025.
He pointed out that the suspension of parliament had so far led to a simplification of the decision-making process, as the decision is now solely in the hands of the government. Therefore, we no longer have that entanglement of decision-making, which will reflect positively on the long-awaited economic reforms.
“Several projects were delayed for years and now we can say we are getting out of the bottleneck and Kuwait is on the right track to drive economic growth with a government-backed consensus to prioritize major development projects, and promote Kuwait as an attractive investment hub by passing a set of long-awaited key laws to support economic reforms. We remain optimistic to witness serious steps towards promoting the private sector’s role in propelling development,” he said.
“We think that our optimistic look about starting economic reforms and improving business environment in Kuwait in the coming period will be supported by actual steps on the ground,” he stressed.
Fiscal Reforms
On whether the fiscal reforms likely to be undertaken by the government, especially those related to current spending, will impact consumer spending and credit in Kuwait, Al-Sager said: “We need to look at the bigger picture as Kuwait needs reforms to support the transition to a dynamic and diversified economy, and to achieve that goal, there is a need for significant reforms to address fiscal imbalances on the public spending side.”
“Kuwait has been experiencing modest growth of the non-oil economy since the pandemic, which requires changes in the composition of public spending with an increased focus on capital investments, to bridge the performance gap with neighboring economies,” he explained.
Al-Sager expected that the impact, if any, of implementing current spending reforms on consumer credit would be temporary, and that the momentum would be quickly restored, as the consumer credit sector in Kuwait is strong, resilient, and highly dynamic.
Kuwait: NBK Joins the Annual Meetings of the International Monetary Fund (IMF) and the World Bank Group (WBG) in Washington, D.C.
22.10.2024In a reflection to its unwavering commitment to advancing international collaboration and knowledge exchange in finance and economics, National Bank of Kuwait (NBK) is participating in the Annual Meetings held by the International Monetary Fund (IMF) and the Board of Governors of the World Bank (WBG). These high-level discussions are held in Washington, D.C. starting from yesterday until October 26th.
NBK’s delegation is headed by Mr. Isam Al-Sager, Vice Chairman and Group CEO, alongside Mr. Omar Bouhadiba, CEO of International Banking Group, and Mr. Nassif Chehab, Head of Financial Institutions Division, as well as Mr. Rani Selwanes, General Manager of NBK - New York.
The delegation will take part in the Annual Meetings, focusing on discussions regarding significant economic and financial challenges. Key topics on the agenda include exploring how do governance reforms promote economic growth and social inclusion.
On the sidelines of the meetings, NBK delegation will attend the Group of Thirty’s seminar, an exclusive annual gathering of central bank governors, senior official and executives of the financial sector, as well as academics. The seminar provides a platform to address the most pressing financial and systemic challenges facing the global central banking community. Additionally, the delegation will participate in the Institute of International Finance (IIF) Annual Membership Meeting.
The delegation will also take part in a joint reception ceremony hosted by Kuwait Banking Association (KBA) for senior international banking leaders on the sidelines of the meetings.
This event will be attended by Kuwaiti banking leaders, heads of international banks, as well as officials from European and Arab central banks, along with a large number of international public figures and decision makers. Additionally, the delegation will attend a reception hosted by the Ambassador of the State of Kuwait to the United States of America.
This year's annual meetings will discuss several important topics, including public debt, fiscal sustainability, and economic growth, by assessing financial risks and analyzing growth indicators in member countries and ways to promote sustainable development. Furthermore, the meetings tackled international trade issues with the continued disruption of shipping traffic in the Red Sea and the impact of geopolitical tensions on the global economic landscape.
Discussions will also address the issue of climate change, how climate change affects the economy and fiscal policies, and means of cooperation between countries to face this existential challenge. Key topics on the agenda also include digitization and innovation, as well as the impact of modern technologies and artificial intelligence on financial markets and the global economy.
NBK’s delegation will hold bilateral meetings with senior international officials on the sidelines of the Annual Meetings of the IMF and the World Bank. Those discussions will focus on some of the key and pressing issues and current challenges that the banking and financial industry has been facing around the world.
The IMF and the World Bank Group Annual Meetings bring together central bankers, ministers of finance and development, parliamentarians, private sector executives, civil society, and academics to discuss issues of global concern.
The Annual Meetings feature several significant committees, with the most notable ones being the Development Committee, the International Monetary and Financial Committee (IMFC), the Group of Ten, the Group of Twenty-Four, etc. The IMFC meeting, in particular, is slated to tackle a range of critical issues including the current state and potential future trends in the global economy's performance, as well as examining developments in international financial markets, and other pressing issues.
Kuwait: NBK to Participate as a Strategic Partner in the Future Investment Initiative (FII) Conference in Riyadh
21.10.2024National Bank of Kuwait (NBK) is participating in the eighth edition of the Future Investment Initiative (FII 8th Edition) with a high-level delegation. The event will take place under the Royal Patronage of the Custodian of the Two Holy Mosques, King Salman Bin Abdulaziz Al-Saud, at the King Abdulaziz International Convention Center in Riyadh, from October 29 to 31.
NBK's role as a strategic partner in the conference aligns with this year's theme, "Infinite Horizons: Investing Today, Shaping Tomorrow." The focus of this edition is on developing new strategies to tackle global challenges, exploring Africa's role in the global economy, and developing women's leadership in both internal structures and practical investment initiatives.
The NBK delegation is headed by Ms. Shaikha Al-Bahar, Deputy Group CEO, and Mr. Zaid Al-Sager, Deputy Head of the International Banking Group, representing IBG. Joining them are Mr. Meshari Bin Salamah, Deputy General Manager and Head of International Corporate & Commercial Real Estate within the International Banking Group, as well as representatives from NBK’s international branches and subsidiaries. Additionally, Mr. Faisal Al Hamad, Chief Executive Officer of NBK Wealth, Mr. Malek Khalife, CEO - Global Private Banking &Switzerland, and Mr. Musaad Al-Sudairy, Board Member and CEO of NBK Wealth – Saudi Arabia, will be present, along with several senior executives from the bank.
During the conference, Deputy Group CEO Ms. Shaikha Al-Bahar will engage in several key panel discussions alongside senior bankers from around the globe. These discussions will focus on critical topics such as women's leadership in driving global economic growth, as well as competition with AI and FinTechs. Furthermore, Mr. Faisal Al-Hamad, Group Chief Wealth Officer at NBK, will participate in a panel dedicated to the financial industry’s role in prioritizing social impact.
The Bank's delegation will hold a series of bilateral meetings with senior international officials at its pavilion during the conference. Alongside these discussions, the delegation will sign several agreements. Additionally, the Bank will host a reception bringing together officials, investors, and senior bankers to explore the latest developments in the financial and banking sectors and to discuss potential opportunities for collaboration in finance and investment.
The conference is anticipated to draw over 5,000 attendees and feature 500 speakers covering a wide range of contemporary topics. With more than 200 sessions planned, discussions will focus on economic stability, equitable development, climate change mitigation, as well as artificial intelligence, innovation, health, and geopolitical issues.
Discussions at the conference will be data-driven, ensuring that insights are rooted in facts and actionable strategies. Through its annual gathering, the Future Investment Initiative Institute aims to foster dialogue on how investment can serve as a catalyst for a prosperous and sustainable future, expanding the possibilities for what can be achieved for humanity.
The 8th Edition of the FII 2024 Conference aims to transcend limitations and unlock boundless opportunities for advancement. Discussions will center on transforming investment into a catalyst for a prosperous and sustainable future, inspiring attendees to think beyond traditional boundaries and explore investment opportunities that bridge current gaps with future potential.
NBK has recently entered into a strategic partnership with the Future Investment Initiative (FII), a global non-profit organization committed to fostering growth and innovation in investment both regionally and internationally, aimed at creating a positive impact on humanity.
NBK is dedicated to actively participating in international forums to remain abreast of the latest developments in the global economy, international development, and the global financial system. This commitment reflects the bank's strategic focus on understanding and adapting to the evolving landscape of global finance and economic trends.
Kuwait: NBK Reports Net Profit of KD 457.0 Million for 9M2024
17.10.2024National Bank of Kuwait (NBK) has announced its financial results for the nine-month period ended 30 September 2024.The Bank reported a net profit of KD 457.0 million (USD 1.5 billion), compared to KD 431.1 million (USD 1.4 billion) for the corresponding period in 2023, improving by 6.0% year-on-year.
In the three-month period ended September 30, 2024, NBK achieved a net profit of KD 164.6 million (USD 540.1 million), demonstrating an annual growth rate of 5.7%.
Total assets as of the end of September 2024 grew by 6.3% year-on-year to reach KD 39.2 billion (USD 128.5 billion), whereas total loans and advances increased by 6.2% year-on-year to KD 23.2 billion (USD 76.0 billion). Likewise, customer deposits stood at KD 22.4 billion (USD 73.5 billion) as of the end of September 2024, reflecting a 7.1% increase compared to the same period in 2023, while shareholders' equity grew by 6.2% year-on-year, totaling approximately KD 4.0 billion (USD 13.1 billion).
The Bank's asset quality also showed significant improvement, with NPL/gross loan ratio declining to 1.39% while the NPL coverage ratio increased to 263%.
Strategic Diversification
Commenting on the Bank’s 9M2024 financial results, Hamad Al-Bahar, NBK Group Chairman, said: "Throughout the first nine-months of 2024, the Group continued to capitalize on the benefits of its strategic diversification approach across its products, services, and geographic presence. This approach has strengthened our operating performance and driven net profit growth, despite the surge of regional and global geopolitical tensions and their broader economic implications."
Al-Bahar elaborated that NBK achieved solid growth, driven by a diversified and resilient business model that effectively navigates shifting operating conditions. He emphasized that this level of growth was underpinned by prudent risk management practices, a strong capital base, high asset quality, and robust liquidity.
Sustainable Development
NBK continued to strengthen its leadership in sustainability throughout the first nine-months of 2024, building on its sound record in environmental, social, and governance (ESG) practices. The Bank remains dedicated to fostering sustainable development within the communities it operates, while actively supporting the reach of sustainable financing initiatives to its clients across all locations.
Al-Bahar underscored the robustness of NBK’s financial position, high credit quality and its competitive edge within the Kuwaiti banking sector; given the Group’s expansive geographical footprint and its unique capability to provide both conventional and Islamic banking services through its subsidiary, Boubyan Bank. Furthermore, Al-Bahar emphasized upon the Bank’s steadfast commitment to fostering sustainable development within Kuwait’s economy while reinforcing its position as the leading corporate in ESG practices.
Prudence and Resilience
Meanwhile, Mr. Isam J. Al-Sager, NBK Group Vice Chairman and CEO, said: “The financial results for the first nine-months of 2024 showcase NBK's consistent ability to deliver profit growth through various economic cycles, steered by its resilient business model and prudent approach to risk management”.
Al-Sager highlighted that the Group endorsed further its leading banking brand and position, as its core business segments continue to witness strong growth rates. He noted that the Group's net operating income rose by 7.8% in the first nine-months of 2024, reaching KD 931.0 million (USD 3.1 billion).
Innovative Products
Al-Sager emphasized that NBK remains focused on strengthening its position across key market sectors while broadening its customer base through the introduction of innovative digital products and services, alongside delivering exceptional customer service. He noted that the Bank’s ongoing efforts and investments in technology and innovation aim to reaffirm its stewardship in providing digital banking services that promote sustainable future growth. Additionally, these efforts are designed to maximize value not only for customers and shareholders but also for the communities in which the Bank operates and to all its stakeholders.
He further pointed that NBK Group has significantly strengthened the contributions of its Islamic division, Boubyan Bank, along with its international operations, to both operating income and bottom-line during the first nine months of 2024. This achievement underscores the strength of NBK's vision and the effectiveness of its diversification strategy. He reiterated that the Group will continue strengthening its international operations, particularly in key growth markets.
Relentless Pursuit of Excellence
Al-Sager emphasized NBK's steadfast commitment to fostering a sustainable future through the prioritization of best-in-class ESG practices. He highlighted the bank's strategic focus on integrating sustainability initiatives into its business operations, viewing them as integral to its corporate culture. This approach is designed to support the transition to a sustainable, low-carbon economy and to fulfill the Bank's ambitious objective of achieving carbon neutrality by 2060.
Following the recent launch of NBK Wealth, Al-Sager highlighted that NBK Group is experiencing substantial growth in this segment. The new structure aims to establish the bank as the largest wealth management entity in Kuwait and one of the most significant players in the region.
Credit and Project Award
In discussing local credit performance, Al-Sager emphasized the substantial recent surge in project awards in Kuwait year-to-date. He expressed confidence that this positive trend in project awards will bode well for business credit going forward.
Al-Sager also noted that several factors including the influx of a significant number of citizens into the labor market, are expected to enhance consumer spending and demand for credit on both, the business and retail side. He emphasized NBK's commitment to aligning its strategic objectives with Kuwait's National Development Plan and to playing a pivotal role in financing future mega projects; confirming NBK's position as the government's key partner in financing strategic national projects.
Prestigious Awards
In the third quarter of this year, NBK reaffirmed its strong banking brand and solid financial position by securing the top spot on The Banker's list of the “Top 100 Arab Banks” for 2024. Additionally, the Bank maintained its ninth position among regional banks. The Banker’s ranking was based on a set of criteria, including Tier 1 capital, total assets, profitability, asset quality, return on capital, and return on assets.
In a further testament to its excellence, NBK has garnered nine prestigious awards from Global Finance, a renowned international publication specializing in finance and business. These accolades recognize the Bank's outstanding achievements in innovation and digital transformation, as well as its commitment to delivering top-tier banking solutions that meet customer needs and align with the rapid technological advancements in the banking sector.
For the second consecutive year, Global Finance has recognized NBK as the "Best in Innovation, Global Winner for 2024”, outranking both conventional and Islamic banks.
The Bank also secured two prestigious awards in the Middle East: Best in Innovation-Middle East, and Best Online Product Offerings – Middle East. Furthermore, NBK distinguished itself at the local level by winning six out of the ten accolades granted to banks in Kuwait, reinforcing its leadership in innovation and digital transformation.
Key financial indicators for 9M2024
• Net operating income stood at KD 931.0 million (USD 3.1 billion), up 7.8% year-on-year
• Total assets grew by 6.3% year-on-year, at KD 39.2 billion (USD 128.5 billion)
• Total loans and advances increased by 6.2% year-on-year to KD 23.2 billion (USD 76.0 billion)
• Customer deposits grew by 7.1% year-on-year to KD 22.4 billion (USD 73.5 billion)
• Shareholders’ equity amounted to KD 4.0 billion (USD 13.1 billion), registering an annual growth of 6.2%
• Strong asset quality metrics, with NPL/gross loans ratio at 1.39% and an NPL coverage ratio of 263%
• Robust Capital Adequacy Ratio of 16.5%, comfortably exceeding regulatory requirements
Kuwait: NBK Reports Net Profits of KD 292.4 Million for the First Half of 2024
16.07.2024National Bank of Kuwait (NBK) has announced its financial results for the six-month period ended 30 June 2024. The Bank reported a net profit of KD 292.4 million (USD 953.6 million), compared to KD 275.3 million (USD 897.9 million) for the corresponding period in 2023, improving by 6.2% year-on-year.
Total assets as of the end of June 2024 grew by 4.4% year-on-year to reach KD 37.7 billion (USD 122.9 billion), whereas total loans and advances increased by 5.4% year-on-year to reach KD 22.7 billion (USD 74.1 billion), while shareholders’ equity reached KD 3.8 billion (USD 12.5 billion), growing by 6.5% year-on-year.
Based on these results, the Board of Directors has resolved to distribute semi-annual cash dividends of 10 fils per share for the period ended 30 June 2024, representing 10% of the nominal value of the shares.
Impressive Financial Performance
Commenting on NBK’s 1H2024 financial results, Mr. Hamad Al-Bahar, NBK Group Chairman, said: “In the first half of 2024, NBK maintained its growth momentum with strong financial results, highlighting the resilience of its diversified and resilient business model amidst evolving operational landscapes.”
“Despite regional and international geopolitical tensions impacting the global economy, the Bank has continued to leverage strategic diversification in its products and services across diverse regions. This success was supported by a strong balance sheet, solid capital base, high asset quality, ample liquidity, targeted investments, and prudent risk management,” Al-Bahar added.
He also indicated that in the first half of this year, NBK continued to strengthen its operations across its markets, adopting the highest standards of sustainability and adhering to the best ESG practices. This commitment underscores the Bank's dedication to seizing optimal and sustainable opportunities while serving as a key partner for its customers in their efforts to secure sustainable financing.
Social Responsibility
On the social responsibility front, Al-Bahar stated that, as part of NBK's commitment to supporting the sustainable development of Kuwait’s economy and leveraging its position as the leading contributor to social responsibility in Kuwait, the Bank signed an agreement in 2Q2024 to develop Sharq area. This collaboration with Kuwait Municipality and Al-Shaab National Real Estate Company involves the establishment of a new public park and parking facilities, with an estimated investment of KD 8 million. The execution of this initiative is projected to take approximately two and a half years.
Sustainable Growth
Meanwhile, Mr. Isam J. Al-Sager, NBK Group Vice Chairman and CEO, said: “NBK’s robust financial results for the first half of 2024 highlight the successful implementation of our strategy for sustainable growth. This achievement reflects our commitment to delivering long-term value to our shareholders, customers, the communities we serve, and all stakeholders”.
Al-Sager explained that NBK’s ability to sustain profit growth across various economic cycles clearly reflects its resilient business model and prudent approach to risk management. He noted that the group's net operating income increased by 8.2% year-on-year in 1H2024, reaching KD 612.4 million (USD 2.0 billion).
“Through its strategic investments in technology and innovation, as well as its commitment to investing in its employees as its most valuable asset, NBK has succeeded in delivering a banking experience that meets the evolving needs of its customers with a range of carefully designed digital services and products. The Bank remains dedicated to investing in these areas, recognizing innovation as a key driver of future growth,” Al-Sager added.
Al-Sager highlighted that NBK Group continued to strengthen its leading banking brand across all business sectors, emphasizing strong performance in key areas in 1H2024. This includes notable growth in international operations which continues to support the Bank’s diversification strategy and contributing positively to both the Group’s operating income and net profits.
He explained that the strong contribution attributed to the international operations to the Bank’s profits, reflects the soundness of the Group’s vision and the proved success of its diversification strides. He also stressed that the Group will continue with its endeavor in strengthening its global banking operations, with an eye on key growth markets.
In parallel with the Bank’s vision to increase international operations’ contribution to profits, expanding its global banking services, its commitment to providing exceptional mortgage solutions and tailored service that meet the investment needs of its clients in international real estate; NBK opened during the second quarter of this year the first international mortgage loan center of its kind in Kuwait at the Bank's headquarters; dedicated to serving clients intending to buy or finance real estate in the United Kingdom, France and the UAE.
“The Group is also witnessing a significant expansion in the area of wealth management, particularly following the recent launch of “NBK Wealth", positioning it as the largest local wealth management firm and a major player in the region,” Al-Sager added.
Economic reform
Al-Sager expressed confidence in the government's ability to tackle significant economic challenges and execute a pragmatic reform agenda, uplifted by the backing of His Highness the Amir, Sheikh Meshal Al-Ahmad Al-Jaber Al-Sabah.
He emphasized that upon the implementation of these reforms and the initiation of significant development projects, alongside increased investment expenditure and alignment with policies that attract investments and bolster the role of the private sector in project operation and management, it will revitalize the local business environment. He highlighted NBK's commitment to solidifying its role as the primary partner of the government sector in funding major strategic initiatives.
On the prospects of domestic credit growth for the year 2024, Al-Sager said: “We are optimistic that credit growth will further improve for the remainder of the year for both business sector and household credit, compared to a decline in growth levels last year.” He attributed this to the positive momentum of project awards during 2Q2024, and anticipates an acceleration in its pace throughout the remainder of the year. Additionally, he cited expectations of lower interest rates in the second half of the year and an influx of Kuwaitis entering the labor market as contributing factors.
Driving Sustainable Leadership
In 1H2024, NBK maintained its leadership in sustainability by successfully issuing its first green bonds totaling USD 500 million. This issuance, oversubscribed by more than 3 times (USD 1.5 billion), marks the first green bond from a Kuwaiti financial institution and the first by a bank in the region this year. It stands as one of the largest green issuances by a conventional financial institution in the region.
In another milestone in sustainability, Al-Sager announced that NBK has joined the Partnership for Carbon Accounting Financials (PCAF) initiative. This move positions NBK as the first bank in Kuwait and one of only six banks in the MENA region to join leading global financial institutions in measuring and disclosing greenhouse gas (GHG) emissions related to its lending and investment activities. He emphasized that this significant step strengthens the Bank's commitment to achieving carbon neutrality by 2060.
He further elaborated that in 1H2024, NBK has entered a strategic partnership with DHL to use the “DHL GoGreen Plus” service. Through its participation in GoGreen Plus, NBK ensures that all its international shipments are transported using Sustainable Aviation Fuel (SAF) rather than traditional jet fuel. This transition leads to a substantial reduction in carbon emissions that are linked to transportation.
Prestigious Awards
Al-Sager highlighted that during the first half of 2024, NBK reinforced its leadership in Kuwait and the region by earning prestigious awards, further enhancing its global recognition.
He explained that NBK has received several prestigious awards from MEED international magazine as part of its MENA Banking Excellence Awards for 2024. The accolades include Best Retail Bank in Kuwait (NBK), Best Innovation Program in MENA, and Excellence in Sustainable Investment in MENA. Additionally, Weyay was recognized as the Best Digital Bank in Kuwait, and NBK Wealth was honored as the MENA Fund Manager of the Year.
Kuwait: NBK Pioneers Sustainable Finance with USD500 Million Debut Green Bonds
02.06.2024National Bank of Kuwait (NBK) has successfully priced its first US$500 million green bonds under its Global Medium Term Note programme.
The Green notes have a 6-year maturity and first call date after 5-years. The inaugural issuance not only marks the first Green issuance by NBK but the first of its kind out of Kuwait, marking a pivotal step towards NBK’s commitment to sustainable and transition finance.
Issued in both Reg S and Rule 144A formats, these bonds represent a landmark debut in the realm of green bonds from a Kuwaiti financial institution. NBK remains the sole FI issuer in 144A format, allowing investors from the US access to the scarce paper out of the country.
Notably, they also stand out as one of the largest green issuances from conventional financial institutions in the MENA region, underscoring NBK's pioneering role in advancing sustainable financial practices.
The issuance aligns with the Group's strategy to enhance the Bank's foreign currency liquidity, improve regulatory ratios, diversify funding sources, and showcase its commitment to ESG practices and principles.
The total order book for the new issuance peaked at US$1.5 billion (Excluding Joint lead managers interest), resulting in an over subscription of more than 3 times. This reflects global investors' strong interest and confidence in the quality of NBK's credit position and its sustainability initiatives as well as the attractiveness of Kuwait as an investment destination.
The bank's bond issuance saw strong reception from a diverse array of global investors and financial institutions. U.S. investors made up 49% of the issuance, followed by Middle East investors at 26%, UK investors at 18%, European investors at 5%, and Asian investors contributing 2% of the coverage.
In terms of the bond coverage by investor type, asset managers accounted for 69%, followed by banks and private banks at 22%, while governments, insurance companies and pension funds made up 9% of the total investor base.
NBK continues to be the tightest non-sovereign issuer out of Kuwait. Strong investor demand provided the bank with a significant advantage in pricing the bonds, which featured a spread of 95 bps over US Treasuries, the equivalent of a 5.522% reoffer yield. The notes were issued at a discount and had a final coupon of 5.500%, fixed with semi-annual coupon payments until their first call date, followed by a floating rate of SOFR + 116 bps paid quarterly thereafter.
The bonds will be listed on the Irish Stock Exchange (Euronext Dublin). The Bank will allocate an amount equivalent to the net proceeds from the bonds exclusively to finance eligible green assets, in accordance with the Sustainable Financing Framework launched by NBK Group in 2022.
Citigroup, JPMorgan, along with HSBC and Standard Chartered acted as Global Coordinators on the issuance. Additionally, Citigroup, JPMorgan, HSBC, Standard Chartered, Goldman Sachs International, First Abu Dhabi Bank, Emirates NBD, and National Bank of Kuwait acted as joint lead managers.
NBK Group's ambitious sustainability strategy is meticulously crafted on a robust four-pillar framework. Rooted in a profound commitment, this strategy spearheads the drive towards a sustainable economy while championing the cause of sustainable finance within the region. At the core of its strategy lies the pillar of "Responsible Banking," shaping the bank's trajectory towards achieving net-zero emissions. This fundamental principle drives the evolution of products, services, and financing solutions offered to customers, embodying NBK's unwavering dedication to sustainability and environmental stewardship.
NBK has achieved significant milestones on its ESG journey. By introducing its comprehensive Sustainable Financing Framework, NBK has elevated its commitment to driving sustainable initiatives. This framework now serves as a cornerstone incorporated throughout NBK's diverse business models, operational strategies, and corporate culture. Embracing a future of sustainability and fostering a transition toward a low-carbon economy, NBK’s progressive approach harmoniously aligns with Kuwait's vision of achieving carbon neutrality by 2060.
Looking ahead to 2030, the bank is steadfast in its commitment to cultivating a sustainable asset portfolio exceeding $10 billion. NBK has also set interim targets for its gross operational emissions (Scope 1 and Scope 2), targeting reduction of 25% by 2025.
Furthermore, NBK is committed to integrating ESG standards into its business activities and decisions and has taken significant steps towards this commitment by joining the United Nations Global Compact (UNGC), the world's largest sustainability initiative for responsible business practices.
Setting new benchmarks in environmental accountability and as part of its carbon neutrality commitment, NBK has recently joined the Partnership for Carbon Accounting Financials (PCAF) initiative. This landmark move positions the Bank as the trailblazer from Kuwait and among just six banks within the MENA region to enlist alongside global financial giants. By participating in this initiative, the Bank commits to meticulously tracking and identifying the greenhouse gas emissions linked to its lending and investment activities, underscoring its dedication to transparent and responsible financial practices.
In a notable achievement, and for the second consecutive year, the bank has recently received a score of "C" from CDP for its Climate Change and Forests 2023 Categories.
Egypt: NBK-Egypt reports EGP 1.28 billion (KD 11.71 million) in net profit in 1Q2024
26.05.2024National Bank of Kuwait - Egypt (NBK-Egypt) has announced net profits of EGP 1.28 billion (KD 11.71 million) for the first quarter of 2024, a significant increase from the EGP 652 million (KD 6.88 million) reported in the first quarter of 2023, showcasing an impressive growth rate of 96.32%.
Net Operating Income stood at EGP 2.75 billion, recording a substantial increase of 48.6% from EGP 1.85 billion recorded in the corresponding period of 2023. In the meantime, Net Interest Income grew by 53.9%, reaching EGP 2.37 billion compared to EGP 1.54 billion in 1Q2023.
On the other hand, Net Operating Income (excluding interests) increased to EGP 382.67 million in 1Q2024, compared to EGP 321.64 million in 1Q2023, up by 18.97%, while Cost to Net Operating Income dropped from 37.51% in 1Q2023 to 26.15% in 1Q2024.
Total assets reached EGP 155.56 billion in 1Q2024, up by 19.10% compared to the year-end balance of EGP 130.61 billion in 2023. Furthermore, the net balance of loans and credit facilities expanded to EGP 86.14 billion in 1Q2024, reflecting a growth rate of 13.25% compared to EGP 70.06 billion recorded at the end of 2023, including a 45.5% increase recorded by the loans and credit facilities in foreign currencies on the back of the appreciation of foreign currencies against the Egyptian pound.
Meanwhile, customer deposits grew by 19.64% to reach EGP 126.73 billion in 1Q2024, compared to EGP 105.93 billion by the end of 2023. This includes a 52.1% rise in the balance of customer deposits in foreign currencies, influenced by the appreciation of the exchange rate and higher return rates on deposits. The Return on Average Assets (ROAA) rose from 2.5% in 1Q2023 to 3.6% in 1Q2024, while the Return on Average Equity (ROAE) increased from 23.7% in 1Q2023 to 33.6% in 1Q2024.
Commenting on the financial results announced by NBK-Egypt, Ms. Shaikha Al-Bahar, Deputy Group Chief Executive Officer, National Bank of Kuwait, and Chairman of NBK-Egypt, said: “In the first quarter of 2024, National Bank of Kuwait - Egypt continued to achieve strong operating performance across its main business sectors, despite the challenging macroeconomic landscape.”
Al-Bahar stated that Egypt remains one of the most prominent strategic markets for the growth of the Group's business, consistently regarded as its second local market. The bank, as the largest Kuwaiti investment on Egyptian soil, has established a significant presence as one of the fastest-growing banks within the Egyptian banking sector. This growth is reflected in the financial indicators and record business results achieved by NBK-Egypt, particularly in recent years.
Al-Bahar emphasized that the continued expansion of the balance sheet and the growth of all financial indicators affirm the success of the bank's business diversification strategy and its accelerated digital transformation efforts. This strategy aims to increase the bank's market share, particularly in retail banking services, in the region's largest market by population.
"We are committed to enhancing the quality of our services, expanding our geographical footprint, and reaching a more diverse customer base. This is made possible by the significant advancements in our digital infrastructure, information technology, and electronic channels. These developments have positioned NBK-Egypt as a strong competitor in the Egyptian banking market, especially amidst the rising demand for banking services and the growing rates of financial inclusion," Al-Bahar added.
Meanwhile, Vice Chairman, CEO, and Managing Director of National Bank of Kuwait-Egypt, Mr. Yasser El-Tayeb, said: “The strength of the bank's business results, which have exceeded all expectations and targets for this period of the year, reflects the resilience and adaptability of our business model. This growth continues despite the exceptional market challenges we face locally, regionally, and globally.”
El-Tayeb emphasized that NBK-Egypt is experiencing balanced growth across all activities and business sectors while maintaining efficiency rates and risk ratios that align with this expansion. This approach ensures business sustainability and customer satisfaction alike, thanks to the bank's prudent policies and its robust business model capable of meeting customer needs and diversifying income sources. This balanced growth is evident in the bank’s diverse credit operations within the corporate sector, which includes large, medium, and small enterprises.
Additionally, the retail banking sector has seen significant growth, with NBK-Egypt continually strengthening its position through advanced services and products tailored to various customer segments and lifestyles. This comprehensive approach establishes NBK-Egypt as a “one-stop-shop” that meets all financial needs. Furthermore, the bank is committed to its horizontal expansion plan, opening new branches to cover key cities and governorates across Egypt.
"We strive to support the global trend towards sustainable finance and the transition to a green economy," he added. "Our focus is on backing environmentally friendly projects that achieve sustainability and increasingly rely on renewable energy. We are also committed to exploring available solutions to mitigate the negative effects of climate change and reduce carbon emissions. Sustainable finance has become one of the most crucial tools for supporting and maintaining long-term financial stability,” Al-Tayeb added.
“Recognizing the significance of technology and electronic channels in the banking sector and their substantial role in bolstering competitive advantage among banks, we have consistently reinforced our electronic services," El-Tayeb emphasized. "We actively encourage customers to broaden their usage of these services for payments, aligning with the overarching policy of the state and the Central Bank of Egypt. This initiative aims to foster financial inclusion and integrate new customer segments into the official banking system, contributing to the shift towards a less cash-dependent society.”
Kuwait: NBK Reports KD 146.6 Million in Net Profits for 1Q2024
23.04.2024National Bank of Kuwait (NBK) has announced its financial results for the three-month period ended 31 March 2024.The Bank reported a net profit of KD 146.6 million (USD 476.8 million), compared to KD 134.2 million (USD 436.6 million) for the corresponding period in 2023, improving by 9.2% year-on-year.
Total assets as of the end of March 2024 grew by 5.1% year-on-year to reach KD 38.3 billion (USD 124.7 billion), whereas total loans and advances increased by 5.7% year-on-year to KD 22.4 billion (USD 72.8 billion), while shareholders’ equity reached KD 3.8 billion (USD 12.3 billion), growing by 7.9% year-on-year.
Commenting on the Bank’s 1Q2024 financial results, Hamad Al-Bahar, NBK Group Chairman, said: “In the first quarter of 2024, we recorded robust profits, showcasing our commitment to delivering long-term sustainable value to our customers, community, and shareholders.”
“As we continue to capitalize on our strategic investments in technology and talent, we remain confident in our ability to achieve further successes in meeting the needs of our customers,” Al-Bahar confirmed.
Al-Bahar emphasized that NBK's ongoing success is built upon solid foundations underpinned by diversification, a key pillar of its strategy. He underscored that strategically diversifying the Bank's portfolio and services across different geographic regions not only mitigates risks but also capitalizes on favorable prospects. This underscores NBK's commitment to adaptability, resilience, and ensuring enduring stability over the long term.
“Kuwait's economy displays resilience and stability, firmly rooted in robust foundations. We expect an uptick in activity within Kuwait's operational scene throughout 2024, resulting in increased project awards and reinforcing trust in the country's business landscape,” Al-Bahar added.
“In spite of the recent escalation in geopolitical tensions in the region, we continue to focus on advancing our operations in the markets we serve while closely monitoring the repercussions on the operating environment in the region,” Al-Bahar explained.
He emphasized that in 2024, NBK maintained its dedication to executing a multitude of impactful initiatives, further solidifying its position as a frontrunner in community development within Kuwait. Simultaneously, these endeavors upheld responsible business practices and played a role in fostering the sustainable advancement of the local economy.
Meanwhile, Mr. Isam J. Al-Sager, NBK Group Vice Chairman and CEO, said: “We have had a strong beginning to 2024, with our business segments maintaining momentum throughout the quarter. This underscores the benefits of our strategic investments and diversified business portfolio.”
Al-Sager highlighted the Bank's robust performance, citing strong revenue and profit growth. He noted that the operational momentum from 2023 carried forward into the current period, resulting in another quarter of strong profits fueled by growth across all business sectors.
“The Group's net operating income increased by 11.2% year-on-year, reaching KD 309.0 million (USD 1.0 billion). This increase was fueled by improved revenues across various business sectors, reflecting the diverse and multiple sources of income within the Group,” Al-Sager added.
Al- Sager stressed that the domestic political environment witnessed some recent instability in the form of changes in parliament and government. This is likely to result in the postponement of the long-awaited investment opportunities in Kuwait. He expressed his hopes of an improved and more stable political landscape going forward; which should positively reflect on the business environment domestically.
Sustainable Growth
Al-Sager highlighted that NBK’s results underscore the success of its strategy in achieving sustainable growth while also delivering long-term value to its shareholders.
He emphasized that the Bank, buoyed by the robustness of its balance sheet and its diversified business model, achieved business volume growth by prioritizing customer-centric approaches and delivering innovative banking experiences.
“We are seeing considerable momentum in both attracting and developing relationships with our clients. This is further supported by our strong position in terms of credit quality and capitalization, providing us with a solid foundation. This positions us well to continue advancing throughout 2024. Our growth strategy and diversified business mix highlight our resilience and stability amid a challenging macroeconomic landscape,” Al-Sager noted.
Al-Sager emphasized the importance of prudent risk management, alongside adequate liquidity, and robust capitalization, which enabled the Bank to maintain its support for customers and achieve a strong performance in the quarter. He emphasized that financial prudence, combined with ongoing investment in innovation and development, reflects the Bank's commitment to supporting customers and the community, especially in challenging times.
He underscored that in 2024, NBK will capitalize on its robust position to advance its goal of extending its brand presence across diverse sectors, notably in wealth management. This encompasses the launch of “NBK Wealth”, aimed at pioneering innovative and advanced solutions in private banking, wealth management, financial planning, investment management, and advisory services through a global network of operations.
Al-Sager also emphasized the significant strides the Bank has made in its digital transformation journey, focusing on enhancing the banking experience to meet the actual needs and aspirations of its customers. This has been achieved through the design and implementation of a range of digital services and products.
Regional Leadership
“In the first quarter of the year, NBK’s regional leadership in sustainability was acknowledged, culminating in receiving the Best Bank in the Middle East for ESG-Related Loans Award 2024 by Global Finance. This accolade underscores our dedication to sustainable business practices and strengthens our aspiration to serve as the key partner for our clients in sustainable financing endeavors,” Al-Sager noted.
Al-Sager also stated that NBK has received a score of “C” in the categories of Climate Change and Forests 2023, as announced by CDP, a globally recognized non-profit organization overseeing the leading environmental disclosure, noting that NBK stands out as the sole bank in Kuwait to be rated by CDP, establishing its position among the leading financial institutions in the GCC engaged in the initiative.
Al-Sager underscored that in 2024, NBK will continue strengthening its position through investing in its people. The Bank will also prioritize offering the best products and services tailored to its customers' needs, expanding its presence in existing markets, and further developing its innovative businesses to better serve its customers and community.
Key financial indicators for 1Q2024
• Net operating income of KD 309.0 million (USD 1.0 billion), up 11.2% year-on-year
• Total assets increased by 5.1% year-on-year, at KD 38.3 billion (USD 124.7 billion)
• Total loans and advances grew by 5.7% year-on-year to KD 22.4 billion (USD 72.8 billion)
• Customer deposits increased by 9.0% by the end of March 2024 to KD 22.3 billion (USD 72.4 billion)
• Shareholders’ equity amounted to KD 3.8 billion (USD 12.3 billion), registering an annual growth of 7.9%.
• Strong asset quality metrics, with NPL/gross loans ratio at 1.51% and an NPL coverage ratio of 248%.
• Robust Capital Adequacy Ratio of 17.2%, comfortably in excess of regulatory requirements.
Kuwait: NBK’s AGM Approves All Motions Proposed by the Board of Directors
24.03.2024National Bank of Kuwait (NBK) held its Annual General Meeting (AGM) for 2023 on Saturday, March 23, 2024, with a quorum of 71.87%. The AGM approved the Board of Directors’ recommendation to distribute 25% cash dividend to shareholders (25 fils per share) for the second half of the financial year, bringing the total cash dividend distributions for the year to 35%, in addition to the distribution of 5% bonus shares (5 shares for every 100 shares owned).
Consistent Progress
In his speech to the AGM attendees, Mr. Hamad Al-Bahar, NBK Group Chairman, emphasized that the strong financial results achieved by the bank in 2023 highlight its unique business model and strong financial position. This performance reaffirms NBK’s dedication to providing the highest returns for shareholders and promoting sustainable growth.
Al-Bahar highlighted the multitude of successes attained by the bank in 2023, further solidifying its track record of accomplishments and leadership both domestically and internationally. These endeavors were acknowledged with numerous prestigious awards, further affirming NBK’s position of excellence.
"Our sustained achievements stem from our core strategy of diversification, which lies at the foundation of our operations. By strategically expanding our portfolio and services across various geographical locations, we mitigate risks, capitalize on potential opportunities, and reinforce our dedication to adaptability, resilience, and long-term stability."
"We remain committed to making substantial strides in executing our strategic agenda, and we are optimistic that our accomplishments over the past year will serve as a catalyst for enhanced performance in the future." Al-Bahar emphasized. He also underscored NBK's robust balance sheet and stable capital foundation, highlighting their role in meeting the evolving demands of customers and delivering optimal returns for shareholders.
Al-Bahar further stated, "Our endeavors yielded improvements across all key performance indicators compared to the previous year. This underscores the effectiveness and adaptability of our long-standing strategy, solidifying our position as a safe haven for investors, depositors, wealth management clients, individuals, and businesses alike. Moreover, we remain committed to leveraging the potential of digital transformation and sustainability initiatives, while fostering collaboration with communities, corporations, and individuals to foster a brighter and more inclusive future."
Social Responsibility
Al-Bahar highlighted the bank's prominent role in social responsibility over the past year, establishing itself as a leader in Kuwait. The bank contributed over KD 28 million across various sectors including healthcare, childcare, societal initiatives, environmental causes, sports, and education.
Expanding our Footprint
Discussing the bank's prospects for the current year, Al-Bahar remarked, "Regarding our outlook for 2024, our expansion efforts will primarily focus on Kuwait as our core market, with strategic initiatives in the GCC markets. We intend to further strengthen our presence in current markets through strategic investments. Additionally, the bank aims to introduce its proven digital banking solutions in other markets, while enhancing its footprint across MENA region."
Unwavering commitment
Al-Bahar emphasized NBK's unwavering dedication to upholding the highest ethical standards and governance principles. He highlighted the bank's dynamic and proactive governance framework, which fosters transparency, accountability, and ethical conduct across all levels. Al-Bahar noted that the Board of Directors, in collaboration with the dedicated executive management team, prioritizes aligning strategic decisions with the bank's core values to effectively serve the interests of its shareholders.
Historical Earnings
Meanwhile, Mr. Isam J. Al-Sager, NBK Group Vice Chairman and CEO, outlined in his speech that the bank reached its highest annual profit on record in 2023 and maintained strong profit trends. This accomplishment was supported by its diversified business model, strategic investments, and resilience in the face of various economic conditions.
Al-Sager highlighted that despite the challenging operating environment and geopolitical tensions experienced last year, the bank achieved a record profit of KD 560.6 million, marking a year-on-year growth of 10.1%. Additionally, the operating profit surged to KD 1.2 billion, reflecting a substantial increase of 15.6%.
Al-Sager further stated, "Our core segments exhibited strong performance and sustained operational momentum, particularly in our international operations and wealth management divisions. Additionally, Boubyan Bank further supported our competitive edge in the local market as the sole banking group offering both Islamic and conventional banking services in Kuwait."
He explained that the bank maintained consistent dividend rates of 35 fils per share by the end of the year, highlighting the strong financial position of the Group and its commitment to providing shareholders with optimal returns.
He highlighted that as of December 31, 2023, total assets stood at KD 37.7 billion, marking a 3.7% year-on-year increase. He attributed this growth primarily to the expanding volume of the Group's business across diverse sectors and activities.
Al-Sager also indicated that shareholders' equity reached KD 3.7 billion, reflecting a notable annual growth of about 7.3%. Return on average shareholders' equity stood at 15.0%, while return on average assets demonstrated strong rates, reaching 1.53% in 2023. Moreover, customer deposits surged to KD 21.9 billion by year end, marking an 8.8% increase compared to 2022. Concurrently, loans and advances experienced a growth of 6.1%, reaching KD 22.3 billion. Additionally, the capital adequacy ratio surpassed the minimum required levels, reaching 17.3%.
Challenges and Opportunities
Al-Sager remarked that Kuwait encountered challenges akin to those experienced globally in 2023. However, he highlighted several opportunities seized upon during the past year. These included the sustained increase in oil prices, the flexibility observed in consumer spending, accelerated growth in the projects market compared to previous years, positive trends in employment and population growth, advancements in the refining sector, and a less hawkish monetary policy approach. These factors collectively contributed to shaping a favorable economic environment in Kuwait.
He highlighted that the remarkable achievements of the bank in the previous year were attributable to several factors, including leveraging its geographical footprint, advancing the digital transformation initiative, and maintaining a robust financial position. These aspects strengthened revenue streams while maintaining the bank's prudent policies over the years. Consequently, this positively impacted asset quality and boosted capitalization.
Centre of Attention
Al-Sager emphasized that in 2023, NBK continued its commitment to prioritizing customers by offering innovative digital services and products to support their financial objectives.
Wealth Management
Al-Sager highlighted that in the previous year, NBK Wealth was introduced as a premier destination for pioneering and sophisticated wealth management solutions. It offers an extensive array of comprehensive services in private banking and advanced asset management through a global network spanning 9 cities across 5 countries.
In the domain of digital transformation, Al-Sager emphasized that the bank leads among financial institutions in digital innovation, prioritizing a banking experience tailored to the actual needs and aspirations of its customers. He noted that the bank's unwavering dedication to addressing customer needs has played a pivotal role in reshaping the lifestyles of its customers through a meticulously crafted range of digital services and products.
Sustainability Momentum
Al-Sager elaborated that the bank sustained its progress in sustainability by embarking on a new trajectory for its environmental, social, and corporate governance (ESG) strategy. This involved the adoption of a formal ESG governance framework and the integration of these standards across its services and products. For instance, it introduced green mortgage loans, consumer loans for electric vehicles, financing options related to sustainability, and low-emission housing loans.
“Recently, we have been recognized as the Best Bank in the Middle East for ESG-related loans. Furthermore, we have successfully finalized and approved the ESG framework, clearly defining responsibilities among members of the executive management. We have also established the Sustainability and Climate Change Committee, which operates under the direct oversight of the Board of Directors.
Al-Sager highlighted that NBK has maintained a high score by CDP, distinguishing itself as the sole bank in Kuwait to receive this recognition. Furthermore, NBK ranks among the highest-rated GCC financial institutions engaged in this initiative. Additionally, the bank has committed to reducing total operating emissions by 25% by 2025 and aims to achieve zero emissions operationally by 2035. These initiatives are integral to the bank's overarching plans to attain carbon neutrality by 2060. Consequently, these efforts led to an upgrade in the Bank's MSCI ESG Governance rating to BBB as per the 2023 review.
A Sustainable Future
"Our agile strategy and resilient business model will persist in steering us towards delivering utmost value to our stakeholders, serving as a cornerstone in our journey towards a digital and sustainable future. We remain steadfast in our commitment to sustaining revenue growth through responsible banking practices, strategic investment in our future, innovative products and services, enhancement of our digital capabilities, fostering holistic community development, and playing a significant role in fostering economic growth in Kuwait and beyond." Al-Sager said.
Focus on profitability
"As we navigate the opportunities and challenges of 2024, our dedication to prioritizing profitability, capital resilience, and sustainable growth remains unwavering. However, we recognize the need to closely monitor several challenges, with geopolitical tensions in the region standing out as particularly significant." Al-Sager concluded.
Diverse Mix
On the sidelines of the AGM, Ms. Shaikha K. Al-Bahar, NBK Deputy Group CEO highlighted that NBK has witnessed positive growth trends in the previous year, demonstrating continued success in executing its strategic plans, confirming that the primary sources of profitability in 2023 were centered around core banking operations.
Al-Bahar explained that NBK's performance in 2023 showcased the effectiveness of its diverse business portfolio and prudent risk management practices. She highlighted the substantial strides made in executing its customer-centric strategy, underscoring NBK's sustained momentum across various fronts. This encompassed achieving robust levels of capitalization, maintaining high credit quality, and strengthening customer relationships, all of which led to an expansion in business volume.
She emphasized that these factors were pivotal in driving last year’s strong performance and will play a significant role in generating sustainable value for shareholders in the long term. She also highlighted the bank's ongoing commitment to expanding its business operations while enhancing the quality of its services.
"2023 served as a testament to the resilience of our investment philosophy in driving growth initiatives and the importance of customer-centricity. These factors propelled the ongoing expansion across our diverse business sectors. Throughout the year, we remained committed to investing in the future, enhancing our digital capabilities to improve customer service, and introducing innovative products and solutions aimed at facilitating our customers' banking needs." Al-Bahar said.
Al-Bahar emphasized that the International Banking Group (IBG) maintained robust performance and supported the balance sheet, accounting for 24% of operating income and 23% of the Group's profits. This underscores their significant contribution to the overall performance of the Group.
She highlighted that in 2024, IBG will strengthen the bank's footprint in key regional markets, particularly in Saudi Arabia and the UAE. This will involve targeting Government Related Entities and Top-Tier Corporations. Additionally, strategic expansion efforts will focus on the European Union, particularly in corporate lending, trade finance, Commercial Real Estate, and residential mortgages. The Group also aims to strengthen its footprint in Asia through its regional hub in Singapore while diversifying its Commercial Real Estate portfolio.
Al-Bahar further emphasized that IBG are committed to diversifying the Group's commercial real estate portfolio. Additionally, they aim to integrate ESG standards into credit management processes while promoting digital and technological investments across the business network.
She emphasized that throughout 2023, the bank remained focused on maintaining high asset quality and strong capitalization. Highlighting the significance of the Saudi market, she noted that it is a key priority for the NBK Group due to the numerous emerging opportunities aligning with the bank's strategic goals. Additionally, she highlighted the profitability of the bank's operations in Egypt, which continue to be among the most lucrative within the Group, boasting the highest returns on both shareholders' equity and assets.
Wealth Management
Al-Bahar highlighted that NBK Wealth Group played a significant role in 2023, contributing 10% to operating income and approximately 11% to the Group's profits. She noted that the previous year marked the official announcement of the launch of its brand, solidifying its position as one of the largest regional groups in comprehensive wealth management. The group caters to high-net-worth individuals and corporations, offering tailored financial advisory services aimed at protecting and growing the wealth of its customers, through offering innovative and comprehensive banking and investment solutions.
She further mentioned that NBK Wealth, with approximately US$37.6 billion in personal financial assets by the end of 2023, boasts an elite team comprising over 100 investment experts and brokers with extensive experience in the field.
Revolutionary Change
Al-Bahar emphasized that the bank has made significant progress in its digital transformation journey by introducing notable updates and enhancements to the NBK Mobile Banking App. These updates represent a revolutionary shift in how customers engage with their everyday banking requirements through a highly efficient and user-friendly interface. This contributes to enhancing and refining the overall customer experience.
The Best Experience
Al-Bahar highlighted that NBK's efforts persist in delivering top-tier banking experiences, operating with the utmost efficiency, and securing a significant market share by offering customers a broader array of options and numerous value-added services. She underscored the bank's consistent commitment to delivering added value for all stakeholders, employing a balanced approach to boost revenues from diverse sources, and enhancing the Group's profitability. This entails maintaining the bank's prominent position in its core business while fostering growth through expansion into sectors beyond its key business activities.
Digital Offerings
She emphasized that NBK remains dedicated to investing in its digital offerings to furnish customers with a unique and unparalleled banking experience. This commitment encompasses the implementation of cutting-edge financial tools and unique banking services, along with regular updates to the NBK Mobile Banking App, acclaimed as one of the premier banking applications in the sector. Moreover, NBK leverages data analysis and artificial intelligence across many of its services, employing machine learning techniques to deliver a personalized experience that surpasses customer expectations.
Social Initiatives
Al-Bahar confirmed that the bank's social initiatives persisted throughout the past year, marked notably by the official introduction of the "Bankee" program. This initiative aims to enhance financial inclusion, particularly among school students, fostering sustainable improvement in financial literacy levels within society. In collaboration with the Ministry of Education and Kuwait Authority for Anti-Corruption "Nazaha,", the program engaged 150 schools and over 16,000 students, supported by the participation of 3,000 teachers. Additionally, the program also included a special needs school for learning difficulties.
She highlighted that the bank's endeavors to support and empower women saw significant recognition with the NBK Rise program receiving the prestigious Best Initiative for Women in Business accolade at the MEED MENA Banking Excellence 2023. This notable achievement reflects the culmination of the bank's dedicated steps towards women's empowerment. Importantly, this effort extends beyond the bank itself to encompass several leading organizations in Kuwait.
Leadership Centre
On the sidelines of the AGM, Mr. Salah Y. Al-Fulaij, Chief Executive Officer – Kuwait remarked that throughout 2023, NBK’s endeavors were marked by initiatives aimed at strengthening its leading position in Kuwait and enhancing customer loyalty.
Al-Fulaij further added that the bank focused on enhancing and refining the NBK Mobile Banking App by incorporating over 30 enhancements to improve both user interface and experience. He highlighted that the App witnessed over 50 million banking transactions in the past year, marking a notable 19% year-on-year growth.
He emphasized that NBK Mobile Banking App is elevating digital offerings to new levels as part of the bank's ongoing endeavors to empower customers through the digital transformation journey. This is particularly evident in the substantial increase in customer satisfaction rates, exceeding 90%, following the recent update of the new App.
The Youth Segment
Al-Fulaij indicated that in 2023, the bank continued to leverage the valuable offerings provided by Weyay Bank, increasing its market share in the youth segment to over 30%. Additionally, the bank forged a partnership with MasterCard, which now serves as the exclusive provider of bank cards.
He highlighted that NBK extended bank cards to SMEs as part of its commitment to catering to the needs and demands of this segment. Moreover, the bank entered into several partnerships to introduce new services, including exclusive offers for retirees in collaboration with the Public Institution for Social Security.
He emphasized that the bank has broadened its range of robust offerings for customers in the premium services sector through partnerships with top-tier brands, providing this segment with an exclusive lifestyle experience.
“We will persist in implementing customer-centric strategies that foster technological advancements and introduce innovative initiatives to bolster NBK's standing as a reliable financial partner and establish new benchmarks in Kuwait's banking industry,” Al-Fulaij said.
Al-Fulaij underscored that NBK's commitment to delivering exceptional products and services to its customers earned it several accolades throughout the year, notably being recognized as the Best Innovation and Transformation (World) by Global Finance. He emphasized that NBK's significant and strategic investments in its workforce, operational infrastructure, and digital platforms over the years have unequivocally proven their worth and effectiveness.
Maximum Benefit
Al-Fulaij emphasized that NBK's Personal Banking Group capitalized on the momentum of consumer spending and operations by offering exceptional banking services and products. He highlighted the implementation of a strategy that prioritizes customer choice based on individual needs and lifestyle preferences when designing products. Additionally, he emphasized NBK's commitment to maintaining a significant digital advantage over its competitors.
He added that the Corporate Banking Group remains steadfast in achieving its strategic objectives, with a primary focus on maintaining and expanding NBK's leadership and market share as the preferred corporate partner in Kuwait.
He emphasized that the bank plans to continue leveraging new business opportunities with existing customers and attract new ones, thanks to its exceptional service and the strength of its capital base.
Al-Fulaij elaborated that in 2023, the Corporate Banking Group introduced a pioneering set of commercial cards, the first-of-its-kind in Kuwait, aimed at empowering customers to manage their business expenses effectively. Additionally, new services were introduced to streamline the provision of digital and physical documents to corporate clients, fostering the growth of our medium-sized corporate clientele.
“In 2024, our focus will remain on maintaining prudent credit risk management practices, We will continuously monitor and assess the performance and effectiveness of our interactions with corporate customers, to continually enhance our offerings. Moreover, we are committed to continue our efforts to integrate ESG standards into our assessments of corporate customer credit and creditworthiness, thereby fostering improved governance in business practices,” Al-Fulaij commented.
Renewed Momentum
Al-Fulaij also noted that Kuwait's operating environment in the past year displayed continued signs of recovery, driven by increased consumer spending and improved business activity. Additionally, there was a gradual recovery in spending and project awards, with project activities experiencing their strongest performance since 2017 in terms of the value of contracts awarded. This positive trend is expected to have a favorable impact on private sector lending.
Key Pillar
Al-Fulaij indicated that the exceptional results achieved by the bank in 2023, along with its robust operational and financial performance, owe much to the exceptional human capital, which stands as the cornerstone of the bank's achievements. He highlighted that the Human Resources Group is persistently dedicated to fostering a work environment conducive to enhancing employees' capabilities, encouraging peak performance, fostering innovation, and driving continuous improvement.
Al-Fulaij revealed that in 2023, NBK allocated approximately 179,000 training hours to its employees, with 142,000 hours dedicated to local training initiatives and 36,700 hours for IBG.
Moreover, the bank initiated numerous academic, motivational, and cultural programs. He emphasized NBK's commitment to providing equal opportunities to all employees, underscoring that this commitment is evident in the bank's workforce composition. Notably, women accounted for approximately 44% of the total workforce, with around 28.8% holding senior management positions. Additionally, Kuwaiti employees constituted about 76.7% of the total workforce by the end of 2023.
He highlighted that the bank's initiatives persist in fostering a workplace culture where individual advancement meets collective achievements. These initiatives entail offering professional development avenues for employees, equipping them to navigate the complexities of the dynamic landscape and the evolving demands of the sector. "Our investments have not only empowered our employees and supported their capability to tackle challenges but have also positioned our organization as a frontrunner in innovation and competitiveness," He emphasized.
"In 2023, the bank's endeavors culminated in receiving five prestigious awards. Among these accolades were three awards from MEED, recognizing our outstanding contributions to women's empowerment initiatives and sustainable development of human resources. Additionally, we were honored with the bronze award from the Society for Human Resource Management (SHRM). The recognition is credited to the NBK RISE program, recognizing the initiative’s excellence in diversity and inclusion. Furthermore, we received the coveted Bronze Medal from Brandon Hall International Group, for our excellence in Best Advance Program in Compliance Training,” Al-Fulaij concluded.
Kuwait: Al-Bahar: We are Optimistic for More Political Stability, Promoting Business Environment in Kuwait
06.02.2024In an interview with Bloomberg, Ms. Shaikha Al-Bahar, NBK Deputy Group CEO, expressed optimism that a stabilized political environment will improve Kuwait's business landscape.
During the interview, Al-Bahar confirmed that in 2023, NBK consistently maintained strong asset quality and solid capitalization.
Optimism & Positivity
Al-Bahar expressed confidence in the impact of Kuwait's political landscape on business prospects. She underscored the favorable perspective on the newly appointed government and the transformative policies introduced by the new Prime Minister. Recognized as technocrats committed to a reform agenda, the new cabinet representatives aim to implement strategic changes that will boost the business environment in Kuwait.
“The new cabinet has started to actively engage with the parliament to align on the direction and promote cooperation,” Al-Bahar stated, noting that while the political scene is currently calm, the resumption of sessions and further interaction and execution progress by the newly appointed government are key to gain more confidence in a more optimistic outlook.
“What is important here is to highlight that a stable period of political dialogue can see a lot of these hanging issues get resolved and translate into a more productive legislative calendar,” Al-Bahar added.
Discussing the projections for 2024, Al-Bahar pointed out that NBK maintains an optimistic and positive outlook regarding the revival of project execution, fostered by a more stable political environment. Such stability is expected to catalyze improvements in the non-oil GDP growth and boost credit demand.
“The strong momentum of projects is expected to continue and feed into the market in 2024, with another KD 6.2 billion worth of awards in the pipeline,” Al-Bahar indicated.
She also pointed out that the projects market rebounded sharply in 2023 with KD +2.5 billion worth of awards: surpassing last year's awards by almost 300%.
“We are hopeful to see some political stability and an improved dialogue between parliament members and the newly appointed cabinet as this will trigger project activity that can revive non-oil GDP activity and demand for credit,” Al-Bahar noted.
Al-Bahar also mentioned that Saudi Arabia is considered a key market that NBK is approaching from all fronts. She also noted that as the operating environment in the kingdom continues to improve, presenting lot of emerging opportunities that align with the bank’s strategic goals.
“We are also expanding under our newly launched Global Wealth Management platform. We have been active in the Saudi market and the NBK franchise is playing an important role in our AUM growth in KSA,” Al-Bahar stated.
2024 Outlook: Navigating the Future
Al-Bahar emphasized that the performance in 2024 may be influenced by an anticipated shift in the Fed’s monetary policy towards a direction that generally does not favor banks, given their business models are designed to thrive in environments of high or rising interest rates. She pointed out that the operational challenge for banks in 2024 will be to defend their margins.
“With our diversification and our growing focus on fee business, we partially hedge revenue from interest rate movements. Our focus will remain on strategy execution and keeping the strength of our balance sheet intact as this is what helps us navigate through different economic cycles,” Al-Bahar explained.
Al-Bahar further elaborated that alongside the core banking's growth momentum, there is an expectation for the ongoing expansion of NBK’s international and wealth management operations, supported by the Group’s presence in key markets, stating that” Our commitment to digital investments will persist in defining our future, with an increased emphasis on incorporating digital services across all business sectors and markets”.
In answering a question regarding provisions in 2023, Al-Bahar explained that the provisions are primarily a precautionary measure, reflecting a historically prudent stance towards managing credit risk.
The challenges facing the Egyptian Pound
When asked about the Egyptian market's condition and the future of the bank's investments there, Al-Bahar stated, "The Group considers Egypt to be a key strategic market for our operations, often referring to it as our 'second domestic market.' She emphasized that NBK has a steadfast presence in Egypt and has no intentions of exiting from this investment, viewing it as a long-term commitment."
“With regards to our operations in Egypt and in domestic currency terms, it remains one of the most profitable in the Group with the highest ROEs and ROAs,” Al-Bahar responded.
“We are looking forward to some easing of geopolitical tensions to allow for some recovery in foreign currency inflows and a reactivation of the government’s asset sales program. Once the confidence is restored in the economy and the currency, we believe there are huge opportunities in Egypt and remain optimistic on its prospects,” Al-Bahar concluded.
Kuwait: NBK Reports KD 560.6 Million in Net Profits for Financial year 2023
01.02.2024National Bank of Kuwait (NBK) released its full year 2023 financial results for the twelve months period ended December 31, 2023. The Group recorded a net profit of KD 560.6 million (USD 1.8 billion), up 10.1% year-on-year from KD 509.1 million (USD 1.7 billion) in 2022.
As of the end of December 2023, total assets grew by 3.7% year-on-year to reach KD 37.7 billion (USD 122.8 billion), whereas customer deposits surged by 8.8% to reach KD 21.9 billion (USD 71.6 billion). Meanwhile, total loans and advances stood at KD 22.3 billion (USD 72.6 billion), up by 6.1% year-on-year, while attributable shareholders’ equity reached KD 3.7 billion (USD 12.0 billion), growing by 7.3% year-on-year.
In terms of distributions, the Board of Directors proposed a cash dividend distribution of 25 fils per share for the second half of 2023, bringing the total cash dividends for the year to 35 fils; a payout ratio of 50% of profits attributable. The Board of Directors also proposed the distribution of 5% bonus shares. The proposed distributions are subject to approval by the Annual General Assembly, which is scheduled for March 2024.
Earnings per share (EPS) stood at 68 fils per share for the year 2023, compared to 61 fils in 2022.
Mr. Hamad Al-Bahar, Group Chairman commented on the financial results: “In 2023, NBK achieved robust financial results, showcasing the adaptability of our business model and affirming our consistent progress toward delivering enduring long-term value to our customers, shareholders, and communities”.
“We persist in making substantial strides in executing our strategic agenda, and we are confident that the initiatives undertaken in the past year will serve as a catalyst for even stronger performance in the future,” Al-Bahar continued.
He also emphasized that NBK has a robust balance sheet and a stable capital base, providing support for meeting the expanding needs of its customers while simultaneously striving to achieve optimal returns for its shareholders.
Al-Bahar expressed optimism that the operational environment in Kuwait will gain momentum in the upcoming period, particularly following the attainment of political stability. This positive outlook is further bolstered by the appointment of new prime minister and government, placing a priority in its agenda on addressing economic challenges and fostering efforts to restore confidence in the business climate.
“Throughout the past year, NBK solidified its pioneering position as a leading contributor to social responsibility in Kuwait; affirmed through contributions exceeding KD 28 million across various sectors, including health, care for children and society, environmental initiatives, sports and education,” Al-Bahar stated.
Al-Bahar emphasized that sustainability has become a pivotal driver to enhance the Bank's long-term growth opportunities. He highlighted that NBK continues to undertake numerous significant initiatives supporting responsible business practices, contributing to the sustainable development of Kuwait’s economy. The latest of these initiatives was becoming a signatory of the United Nations Global Compact; recognized as the largest sustainability initiative for responsible business practices.
Meanwhile, Mr. Isam J. Al-Sager, Vice Chairman and Group CEO, said: “In 2023, we delivered a robust performance, experiencing growth in both revenues and profits. The favorable operational performance persisted across our business, as we continued to leverage the advantages of our diverse business portfolio and strategic investments in talent and technology”.
Al-Sager underscored that NBK’s primary business sectors demonstrated strong performance throughout the year, registering increased momentum in the operational performance across key areas including international operations and wealth management. These key segments are witnessing substantial expansion in alignment with the Group's strategic plans to grow in main markets and enhance its offerings in investment and wealth management services.
"The Group's net operating income surged by 15.6% annually, reaching KD 1.2 billion, driven by the growth of net interest income and fees and commissions." Al-Sager added.
He further explained that the growth in profitability aligns with the strength of NBK’s financial position. The expansion of the loan portfolio, total assets in general, and customer deposits was sustained while maintaining robust asset quality levels, thanks to NBK’s prudent risk management policy.
“In 2023, we witnessed a compelling demonstration of the strength of our investment philosophy in growth initiatives, underscoring the value of our customer centricity. This played a pivotal role in the sustained growth of our diverse business sectors as we persistently invested in the future throughout the year. A central focus was placed on enhancing our digital capabilities to better serve our customers.. We also introduced innovative products and solutions crafted to assist our customers in seamlessly meeting their banking needs,” Al-Sager confirmed.
He emphasized that throughout the year, NBK maintained a steadfast focus on positioning its customers at the core of its priorities, supporting their financial goals through the provision of innovative digital services and products. Notably, the bank garnered several prestigious accolades during the year, including the recognition for being the most innovative bank worldwide in delivering digital banking services by Global Finance Magazine.
“As we navigate the opportunities and challenges that the year 2024 may present, our commitment remains unwavering in maintaining a focus on profitability, capital robustness and sustainable growth. We also acknowledge the importance of closely monitoring various challenges, particularly the escalating geopolitical tensions. Consequently, we approach the future with a sense of caution, mindful of the potential impacts on the operational environment in the region,” Al-Sager said.
He highlighted that the Group, guided by a commitment to responsible leadership, has embraced a new trajectory for its ESG strategy through the formal adoption of a framework for ESG standards. This commitment is evident in the integration of ESG principles into products and services, including offerings such as green mortgage loans, consumer loans for electric cars, eco-friendly housing loans and sustainable finance value propositions.
In addition to that, NBK is committed to reducing its total operational emissions by 25% by 2025 and strives to achieve net-zero operationally by 2035. These efforts are integral to the Bank's comprehensive plans to attain carbon neutrality by 2060. These initiatives have played a role in improving NBK’s MSCI ESG ratings to BBB, in their 2023 review.