Gulf Bank records KD 11.8 million in Net Profit for the First Half of 2020
- Gulf Bank’s prudent cost reduction efforts resulted in a 21% decline in Q2-2020 vs. Q1-2020 operating expenses.
- The Central Bank of Kuwait played a vital role in protecting the Banking System from Money Laundering crimes.
- The Capital Adequacy Ratio (CAR) remained strong at 16.8%, which is well above regulatory requirements.
Kuwait, 10 August 2020: Gulf Bank K.S.C.P. announced its financial results for the first quarter ending 31 March 2020 and the first half ending 30 June 2020. For the six months ending 30 June 2020, the Bank recorded a net profit of KD 11.8 million, a decline of KD 12.2 million or 51% compared to the first half of 2019 net profit of KD 24 million. This reduction was mainly due to lower interest income on loans and lower fee / foreign exchange income. However, favorable liquidity conditions have resulted in the Bank’s interest expense declining by 6.3 million or 22% from the first quarter to the second quarter of 2020. Similarly, the Bank’s prudent cost reduction efforts have resulted in the Bank’s operating expenses dropping by KD 4 million or 21% from the first quarter to the second quarter of 2020.
Net Loans and Advances to Customers were KD 4,189 million at the end of June 2020, up KD 234 million or 6% compared with the end of June 2019.
As of the end of June 2020, Gulf Bank’s Capital Adequacy Ratio (CAR) remained strong at 16.8%, well in excess of regulatory requirements.
Commenting on the results, Mr. Jassim Mustafa Boodai, Gulf Bank’s Chairman said: “We are going through unprecedented times. The consequences of the COVID-19 pandemic have impacted the global economy and financial sector. Kuwait, just like all other countries, has been affected by the pandemic. In response to the pandemic, the Central Bank of Kuwait took early action by (1) lowering its Discount Rate by 125 basis points in March, providing immediate cash flow relief to corporate borrowers in the form of lower interest payments and (2) relaxing capital and liquidity requirements to promote favorable liquidity conditions. To support the cash flow needs of retail customers, the banking community agreed to defer loan installments and credit card payments for six months and Corporate customers could elect to defer principal payments due between April and September. Finally, a new government scheme for Corporate and SME customers was rolled out to support their cash flow needs until the end of 2020.”
Mr. Boodai then added: “During these challenging times, Gulf Bank continued to provide uninterrupted services to its clients. We maintained close relationships with all our customers — corporate and retail clients alike — and attended to their needs, providing them with the necessary solutions to support their businesses and financial requirements during these tough times. Our digital platform, including online banking, mobile banking and our 24/7 call center, continued to operate without disruption.”
Commenting on the recent issues related to suspicious money laundering/financing of terrorism transactions in Kuwait, Mr. Boodai said: “We would like to reiterate that at Gulf Bank, we have performed our role as part of the Kuwaiti banking industry in reporting any suspicious transactions to the Financial Intelligence Unit (FIU). We are continuously in full compliance with Central Bank of Kuwait regulations, instructions and Law 106/2013 in relation to money laundering. We have a dedicated, independent Anti-Money Laundering (AML) unit and our staff are well-trained and continuously updated on matters related to illegal and suspicious operations.” Mr. Boodai added: “We truly appreciate the role of the Central Bank of Kuwait in taking the necessary supervisory measures to maintain monetary and financial stability as well as protecting the banking system from the risks of money laundering crimes.”
Gulf Bank continues to be well recognized in terms of international creditworthiness and financial strength, and is an “A” rated bank by all four leading credit rating agencies.
Fitch: Long Term Issuer Default Rating “A+” rating with a “Stable” Outlook
S&P Global Ratings: Issuer Credit Rating “A-” rating with a “Negative” Outlook
Moody’s Investor Services: Long Term Deposits “A3” rating with a “Stable” Outlook
Capital Intelligence: Long Term Foreign Currency “A+” rating with a “Stable” Outlook
Employees Wellbeing & Development
Gulf Bank continues to support its human capital training and development during these exceptional times. The Bank has utilized various digital tools and has safely resumed employee training and development through remote and virtual training programs that prioritize the health and safety of its employees.
In response to the unprecedented circumstances resulting from the ongoing COVID-19 pandemic, Gulf Bank has launched its “Employee Wellbeing Program” to help its employees cope with the changes brought about by the pandemic and their effects on emotional and mental wellbeing. The program, which offers employees access to professional counseling through a series of focused workshop sessions, is designed to target specific challenges facing the Bank’s workforce, particularly the frontline employees who work directly with customers. These workshops, exclusive to Gulf Bank employees, offer a focused approach towards raising awareness on various topics such as mental health, human relations, creative problem solving, and motivation.
Mr. Boodai concluded his remarks by stating: “During these challenging times, I would like to thank everyone that contributed to these results, specifically our shareholders for their ongoing trust, and our employees for their commitment and dedication. I would also like to thank the Central Bank of Kuwait for their exceptional efforts in supporting the banking system in Kuwait. And finally, I want to thank our customers for their loyalty, especially during these unprecedented times.”