11 August 2020
Ahli United Bank reports Net Profit of KD 17.7 Mn for the First Half of 2020
Ahli United Bank K.S.C.P announced its results for the first six months of this year by confirming taking all required measures, precautionary and impairment provisions to mitigate the impact of COVID-19 on economy and on the materially impacted business sectors. Accordingly, the Bank has recorded a net profit for the first half of 2020 amounting to KD 17.7 million which is lower by 43% than the KD 30.8 million of net profits recorded for the same period last year.
In compliance with the directives of the Board of Directors and the governmental policies, 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 4.4 billion at the end of the 1H2020 higher by 10% over the assets recorded in June 2019 with KD 4 billion (KD 4.35 billion in December 2019). The finance and customer deposits portfolios have grown to reach KD 3.1 billion and KD 2.8 billion respectively at the end of June 2020 higher than KD 2.9 billion and KD 2.5 billion recorded respectively at the end of 1H2019 representing a growth of 6.9% in finances and 12% in customer deposits (finances KD 3 billion and deposits KD 2.7 billion in December 2019).
To provide further relief for retail customers from the implication of this pandemic, the Bank has joins 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 CBK directives. The capital adequacy ratio has reach 14.85% at the end of June 2020 which is comfortably higher than the CBK current minimum required ratio of 11% currently adopted. 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 reach 1.9% in June 2020 (1.3% in December 2019) with an adequate provision coverage of 192.2% excluding the collaterals.
Commenting on the H1 2020 results, the Chairman of Ahli United Bank, Dr. Anwar Ali Al-Mudhaf, said that 2020 has been unusual year by all means since its inception when businesses have been interrupted, travel was banned and the shutdown of commercial and service centers across the country. All these measures were considered mandatory to fight the quick spread of the virus however it has resulted in creating weaker demand and supply, slower economic growth rate in all markets and deterioration in the stock and financial markets in addition to a collapse in the international oil prices.
The Bank dedicated in striking balance between satisfying the customer needs, provide relief and push the economic growth in one side and apply the maximum health and safety measures on customers and employees on the other side by working under the umbrella of CBK to assist on overcoming the pandemic implications at the minimum losses.
Dr. Al Mudhaf added, the Bank has taken part of the KD 10 million CBK’s fund to compliment the health and security policies in fighting the spread of the virus. This initiative is part of the Bank’s overall corporate social responsibility. The Bank has further relieved its retail and credit cards customers from the burden of 6 months of installments free of any additional fee or charge whereby the installment April-September 2020 have been deferred until the end of the contracts. Dr. Al Mudhaf advised; we are proud of witnessing our executive a management and the Bank staff members fully committed and extending comprehensive banking services and facilities to our clients and stay in full contact with customers and community.
Furthermore, the effective measures undertaken by AUB in the field of business automation has relatively reduced the business disruption and our customers are able to do many more services through bank’s website and mobile application without visiting to the branch.
Dr. Anwar Al-Mudhaf expressed thanks and appreciation for the Bank’s shareholders and customers for their committed support to and deep trust in the Bank. He also expressed appreciation to the Central Bank of Kuwait, 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.
Commenting on AUB half yearly financial results, Mrs. Jehad Al-Humaidhi, Acting CEO of AUB advised that during this exceptional time, we have placed our customers and employees safety and health on the top of our priorities by launching an emergency business continuity plan. The plan has enabled the Bank to continue providing all required services to the customers embarking on its advanced 24X7 digital platforms. The customers are performing banking activities conveniently from home while preserving themselves, their families and community.
Jehad has affirmed that the Bank is continuing its services through the branches as well by adopting the required health and safety measures and with the business gradual recovery, the positive outcomes have been witnessed by showing higher volume in business. She has added; despite the challenges ahead, we are confident that the Bank with its capabilities will be able to overcome all implications caused by the outbreak of COVID-19 virus.
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 this pandemic to be recovered and Allah to protect Kuwait and the world.