Kuwait Finance House on track to top profit for last year

Kuwait Finance House, the country’s largest Islamic lender, expects to surpass last year’s profit thanks to projected increase in finance income and shedding of non-core assets, its group chief executive said yesterday.

Net profit last year rose 9.1 per cent to 126.5 million Kuwaiti dinars (Dh1.53 billion) from 115.9m dinars a year earlier. Net finance income increased 8 per cent to 363.4m dinars from 336.4m dinars in 2013.

Net profit in the first half of this year climbed 14.1 per cent to 62.3m dinars from a year ago


“The main reasons [for the profit increase] are financing income and focus as financing income,” said Mazen Al Nahedh. “Number two, we got rid of some of our non-core investments over the past nine months. We are focusing on making our balance sheet more efficient, ie reducing our heavy risk-weighted assets and concentrating on better return low-risk assets.”

The lender is also restructuring its Malaysian unit, a process that may take up to a year, to boost profitability after ruling out a merger or sale of its subsidiary.

It is eyeing expansion in the Middle East and North Africa market, especially in Egypt through an acquisition, once the opportunity arises.

In its home market of Kuwait, the lender does not expect to be affected by lower oil prices because the energy-exporting Arabian Gulf state continues to spend on infrastructure.

“It [the impact of lower oil prices] will be probably felt over 2016-17 if the government stops spending,” said Mr Al Nahedh. “However, from what we see right now the government spending is specifically accelerating on the infrastructure projects. We are in the process of bidding for three large transactions and as such we hope these materialise and those are going to keep us busy as a banking system.”

Kuwait’s current fiscal year, which began on April 1, includes spending of 19.17 billion dinars and revenues of 12.2bn dinars.

Kuwait usually undershoots its spending programme because of project delays and logjams with the country’s influential parliament, which often blocks projects and cancels awarded contracts.

dalsaadi@thenational.ae

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