Ahli United Bank K.S.C.P. (AUBK) announced its results for the nine months of this year by continuing to take the required measures, and impairment provisions to mitigate the impact of COVID-19 on economy in general and especially on the banking sector. Accordingly, the Bank has recorded a net profit for the nine months of 2020 amounting to KD 23.1 million which is lower by 48.9% than the KD 45.2 million of net profits recorded for the same period last year.
The Bank continued its efforts to expand the financing activities and extend all possible support to the business sectors affected by the pandemic. The Bank has adopted lower profit rates on finance which came as part of the governmental economic stimulus being an attempt to overcome the tough implications of the pandemic on customers. Accordingly, the total assets have grown up to reach KD 4.31 billion at the end of the Q3 2020 higher by 4.6% over the assets recorded in Sep 2019 with KD 4.12 billion (KD 4.35 billion in December 2019). The financing receivables and customer deposits portfolios have grown to reach KD 3.12 billion and KD 2.77 billion respectively at the end of Sep 2020 higher than KD 2.95 billion and KD 2.63 billion recorded respectively at the end of Q3 2019 representing a growth of 5.8% in financing receivables and 5.3% in customer deposits (financing receivables KD 3.02 billion and deposits KD 2.60 billion respectively in December 2019).
The bank has effectively continued to take proactive measures to support its customers during this pandemic, and to continue to provide banking services without interruption throughout the period of the pandemic and from this standpoint, the Bank has joined the Kuwaiti Banks in the initiative of postponing the retail finance monthly installments for 6 months without any additional fee or charge with a modification loss of KD 11.5 million recorded under the shareholders equity at the end of the period in accordance with Central Bank of Kuwait (CBK) directives. The capital adequacy ratio has reach 14.8% at the end of Sep 2020 which is comfortably higher than the CBK current minimum required ratio of 11%. The available margin will support the expansion in financing, services and operations as per the Bank’s determined plans.
Following conservative measures in facilities classification, the non-performing finances increased to 2.34% in Sep 2020 (1.26% in December 2019) with an adequate provision coverage of 163.7% excluding the collaterals (Dec 2019: 263.7%).
Commenting on the results, Dr. Anwar Al-Mudhaf, Chairman of Ahli United Bank said: Despite the increased state of optimism with the gradual return of life and economic activities to normal, the Bank has increased its precautionary provisions in order to maintain good levels of asset quality, forming a strong buffer to increase the ability to face any future repercussions that may result from the Covid-19 pandemic, and the decline in profits during the first nine months of this year, as a result of the increase in provisions, which reflects the Bank’s conservative policy the efficiency of its prudent risk management plans which is in line with CBK directives.
We are continuing our efforts against the health and economic challenges imposed by the pandemic which negatively impacted economic growth rates in creating weaker demand and supply, in all markets and deterioration in the stock and financial markets in addition to a collapse in the international oil prices. The Bank is sparing no effort to strike a balance between satisfying the customer needs, provide relief and push the economic growth from one side and apply the maximum health and safety measures on customers and employees on the other side.
He added, despite these exceptional circumstances which imposed a challenging business environment, the Bank was able to maintain a steady performance and achieve a good level of results. Dr. Anwar praised the actions taken by the government and CBK to protect the health and well-being of citizens and residents and extending the support to the impacted businesses. Adding, we are proud of our management and employees for complying with the health directives and going beyond the call of duty to provide comprehensive banking services staying always connected with our customers.
Dr. Anwar Al-Mudhaf expressed thanks and appreciation for the Bank’s shareholders and customers for their committed support and deep trust in the Bank. He also expressed appreciation to the CBK, health and security authorities and all supervision authorities and lauded the efforts of the Bank’s executive management and all its employees that enabled the Bank to manage this crisis and he extended a special thanks to the workers at the front lines to provide customers with exceptional service during the different phases of the pandemic.
Mrs. Jehad Saud Al-Humaidhi, Acting CEO of Ahli United Bank, said: despite these exceptional circumstances, Ahli United Bank was able to continue to achieve success, which is evident through its winning of several awards during the current year, including: Best Bank in Online Cash Management for the year 2020 in Kuwait within the corporate banking sector for the fourth year in a row, the award for "Best Bank in Information Security Protection and Fraud Management” in Kuwait for 2020, and the "Best Bank for Social Responsibility” in Kuwait for the year 2020 by International Finance Magazine, the global financial journal.
Al-Humaidhi affirmed: We put the safety of our customers and employees on our list of priorities, by developing an integrated plan to enable our human resources to work remotely to ensure their safety and the continuation of business and services with the necessary efficiency. We have relied on our distinguished digital platforms, which have proven their readiness and efficiency in providing safe and appropriate services that allow customers to continue completing their banking transactions without leaving their homes, in the interest of their safety and the safety of their families and the community.
We continue to provide our banking services around the clock, and we are keen to receive our customers through the bank’s branches while adopting the required health and preventive measures for both the bank’s customers and employees and with the gradual return to economic activities, we are beginning to see an improvement in the volume of business.
Despite the "Covid-19" pandemic and its negative repercussions on the global and local economy and the slowdown in growth and difficulties it caused in many sectors, we are very confident in the ability of AUBK to deal with the consequences of the crisis with a high level of proficiency.
Al-Humaidhi concluded by extending appreciation to the employees of the Bank for their dedication and cooperation which has assisted in overcoming the implication of this pandemic and confirmed again the resilience, readiness and solid resources of the Bank to cope with any shortcomings that may come in the future. She has prayed for recovery from this pandemic and Allah to protect Kuwait and the world. We also would like to reassure our customers of the bank's readiness and the stability of its financial position, which will always enable it to deal with the post-Corona phase and face the challenges that may arise from it later.