The “Al-Shall” report touched on the results of Kuwait Finance House Bank (KFH) for the first quarter of this year, which indicate that the bank’s net profit (after tax deduction) amounted to about 185.7 million dinars, an increase of about 98.5 million, or about 113.1 percent. Compared to about 87.1 million for the same period in 2022.
This increase in the level of net profits is due to the completion of KFH’s acquisition of “United Bahrain”, and to the increase in total operating profit in exchange for the decrease in total provisions, as the bank’s operating profit (before deducting provisions) increased by 102.9 million, or 69.5 percent, while Total provisions decreased by about 16.8 million, or by 41.4 percent.
The increase in the value of profits was deducted from the increase in taxes by about 12.1 million, or by about 58.4 percent, in addition to the bank recording cash losses of about 9.1 million as a result of applying an international accounting standard to its bank in Turkey as a result of high inflation rates.
In details, total operating income increased by about 150.9 million, or about 66.2 percent, to reach about 379.1 million, compared to about 228.2 million for the same period of the previous year.
This was achieved as a result of the increase in all items of operating income, the most important of which was the increase in the item of net financing income by about 66.9 million, or by 42.1 percent, to reach about 226 million, compared to about 159.1 million. Also, the item of investment income rose by about 62.5 million, or by 526.5 percent, to about 74.3 million, compared to about 11.9 million.
On the other hand, total operating expenses increased by about 48 million, or about 60 percent, to about 127.9 million compared to about 79.9 million. This came as a result of the increase in all items of operating expenses. The percentage of total operating expenses to total operating income was about 33.7 percent, after it was about 35.0 percent during the same period in 2022.
Total provisions decreased by about 16.8 million, or by 41.4 percent, as mentioned above, to reach about 23.8 million, compared to about 40.4 million. All of the above explains the increase in the net profit margin to about 49.0 percent, compared to about 38.2 percent for the same period of the previous year.
The total assets of the bank decreased by about 114.6 million, or by 0.3 percent, to reach about 36.855 billion, compared to 36.969 billion at the end of 2022, while it increased by about 14.691 billion, or by 66.3 percent, when it reached about 22.164 billion when compared with the same period of the previous year. That is, before the acquisition takes effect.
The item “finance receivables” increased by about 318.8 million, or by 1.7 percent, to reach about 19.158 billion (52 percent of total assets), compared to about 18.840 billion (51 percent of total assets) by the end of 2022, and increased by about 7.307 billion, or by a percentage of 61.6 percent, compared to the same period in the previous year, when it reached about 11.852 billion (53.5 percent of total assets). The percentage of total “finance receivables” to total depositors’ accounts was about 81.7 percent, compared to about 75.1 percent. While the item of cash and balances with banks and financial institutions decreased by about 373.4 million, or by 11.8 percent, to about 2.782 billion (7.5 percent of total assets), compared to about 3.156 billion at the end of 2022 (8.5 percent of total assets), while it increased by about 792.5 percent. million, or by about 39.8 percent compared to the same period of the previous year, when it amounted to about 1.990 billion (9.0 percent of total assets).
The figures indicate that the bank’s liabilities (excluding equity) decreased by 36.7 million, or by 0.1 percent, to reach 30.647 billion, after it was at about 30.683 billion at the end of 2022. While liabilities increased by about 10.713 billion, or by 53.7 percent, at Comparison with the same period of the previous year, when it amounted to about 19.933 billion. The ratio of total liabilities to total assets amounted to about 83.2 percent from about 89.9 percent.
The results of the analysis of the financial statements calculated on an annual basis indicate that most of the bank’s profitability indicators have recorded an increase compared to the same period in 2022, as the return on the bank’s average assets (ROA) rose to about 2.0 percent, after it was at 1.6 percent. . Also, the rate of return on the bank’s capital (ROC) rose to about 52.7 percent, after it was at 39.3 percent.
While the average return on equity for bank shareholders (ROE) decreased to about 12.2 percent, compared to about 14.7 percent. Earnings per share for the Bank’s shareholders (EPS) increased, reaching 11.06 fils, compared to 6.60 fils. The price/earnings per share index (P/E) was about 18.6 times, compared to about 40.6 times (i.e. a significant improvement), as a result of the increase in earnings per share (EPS) by 67.6 percent against the decrease in the share price by about 23.0 percent, compared to their level in At the end of March 2022, the price/book value multiple (P/B) index was about 2.3 times, compared to about 5.4 times.