Boubyan Bank Records KD 44 Million in Operating Profits, and Allocates KD 25 Million as Precautionary Provisions for the First Half of This Year
Al-Majed: With Allah’s Help, We Will Overcome the Ongoing Crisis, Despite Its Severity
The Current Situation Confirms the Success of Boubyan Bank’s Digitization Strategy
We Take Pride in Our Human Resources, and Their Role to Provide All Services to Customers throughout the Crisis
Boubyan Bank has announced KD 44 Million in operating profits for the first half of this year, despite the exceptional situation the world and Kuwait are going through due to the unprecedented repercussions of the Covid-19 pandemic that swept the globe over the past months, leading to the halt of almost all aspects of our daily lives.
Furthermore, the Bank continued its prudent approach by allocating KD 25 million in provisions, thereby ending the first half of the year with KD 17 million in net profits.
Mr. Adel Abdul Wahab Al-Majed, the Bank’s Vice-Chairman & Chief Executive Officer, commented: “Thanks to Allah, we built on our experiences over the past years, and managed to deal with the ongoing crisis professionally by continuing to record profits, and we hope all businesses in Kuwait will return to work normally.”
“Of course, we had to allocate additional precautionary provisions to strengthen the bank’s financial position, and to bolster our ability to face any future repercussions of the ongoing Covid-19 crisis, which is normal as a result of this unprecedented crisis; a first of its kind in our modern world.”, he added.
With Boubyan Bank’s acquisition of the Bank of London and Middle East “BLME” during Q1 of this year, the combined assets of Boubyan Bank Group grew by 28 % until the end of Q2 to reach KD 6.1 billion. Also, the total of customers’ deposits grew by 19 % to reach KD 4.7 billion, while the financing portfolio grew by 28 % to reach KD 4.5 billion, and operating income grew by 8 % to reach KD 79 million.
Al-Majed went on to add: “Everyone is focused upon the post Covid-19 stage, and that many things will change as we are now facing new challenges whether those related to the nature of business, or the new investment opportunities in light of the clear change in business models. The bank is currently working with its partners to align its business model with the post Covid-19 era, and to evaluate the impact of such unprecedented challenges on Kuwait, and the economic sectors therein.”
“During the crisis, the bank’s human resources demonstrated that they were able to face the difficulties and the risks caused by Covid-19, and this ability manifested itself when the bank continued to perform in the best possible manner without failing to serve customers owing to the skills of our staff who worked during the crisis.”, Al-Majed added.
Boubyan Bank during the Crisis
Moreover, Al-Majed highlighted the most significant initiatives of the bank during the crisis, starting with the bank’s contribution to the KD 10 million fund established by the Central Bank of Kuwait, and co-funded by Kuwaiti banks, to support the government’s efforts to fight the Covid-19 outbreak.
Also, the bank dedicated all its resources in implementing the resolution of deferring all the installments of financing and credit cards for all customers in addition to deferring the installments for SMEs for a six-month period effective April 2020, without charging any additional profits or other charges for the deferral period.
Al-Majed stated: “During this crisis, we reaped the fruit of our investment in our digital banking services. Since the beginning of the crisis, we noticed the growing usage of our digital banking services by our customers whether through the bank’s website or through the bank’s mobile App.”
“Without delving into details about the services and products available to our customers via our website or our mobile banking App, customers can now perform many of their banking transactions without the need to visit our branches. They can now do so while staying at home, especially during curfew times.”, he added.
In April, the bank started to receive applications for concessional financing announced by CBK as a part of the stimulus package to support corporate customers & SMEs impacted by the ongoing crisis.
All financing procedures are easily and smoothly processed electronically, while ensuring the confidentiality of information and data, thereby meeting the objectives of CBK to facilitate and accelerate access to financing to the specific sectors included within the economic stimulus package.
This step aims at supporting vital sectors, and activities which add value to the Kuwaiti economy, and which were efficiently operational before the crisis, while working hand-in-hand with the Central Bank of Kuwait and other bodies to prevent any exacerbation of the situation, by turning from a liquidity crisis to a solvency crisis, and to maintain the national manpower and circular flow of funds between economic sectors.
Al-Majed thanked all entities that managed the crisis, especially frontline personnel, and thanked CBK as well for the measures taken by it, which alleviated the severity of the crisis.
Achievements of the First Half of the Year
Al-Majed pointed out that: “Boubyan Bank has succeeded in its regional and international offering of its debut unsecured sukuk under the umbrella of a sukuk program with total bids amounting to USD 4.6 billion approximately, i.e., the issuance was oversubscribed by more than six-fold over the targeted amount (i.e. USD 750 million), with the sukuk subsequently listed on the Irish Stock Exchange.”
During Q1 of this year, Boubyan Bank announced its acquisition of additional shares in the Bank of London and Middle East “BLME”, amounting to 45.25% approximately. Accordingly, the total holding grew to approximately 71% of BLME’s ordinary issued shares after adding the shares already owned by Boubyan Bank Group.
Al-Majed stressed: “Increasing our shareholding in BLME will help us develop its business and grow both banks. Following the completion of the acquisition, Boubyan Bank’s intention is for BLME to continue to work as an independent bank as a part of Boubyan Bank Group.”
“Furthermore, Boubyan Bank has continued to top the pyramid of customer service in Kuwait, supported by earning two awards from Service Hero, the international consumer-driven customer satisfaction index. The bank received the First Place Award in Customer Service as a Country Winner, for the fifth time in addition to being named the Best Islamic Bank in Customer Service for the tenth year in a row since 2010. Additionally, the bank received the Decade's Award for the best Islamic bank.”, Al-Majed noted.
Moreover, the bank was named the Best Islamic Bank in Kuwait in 2019 by Global Finance for the fourth consecutive year.