Warba Bank net profit rises 298% to KD 1.3m

Overall revenues increased by 54% to KD 12.1 million in Q1 2017

Abdulwahab Abdullah Al-Houti and Shaheen Hamad Al-Ghanim

KUWAIT: Warba Bank, Kuwait’s best investment bank and corporate consultancy institute that operates according to the Islamic sharia, announced achieving excellent financial results – thanks to God Almighty – during the first quarter of 2017, reflected by a 298 percent increase in net profits which reached KD 1.3 million compared to KD 328,000 during the same period last year. These profits were achieved as a result of overall revenue growth, supported by the strong performance of all business units, reaching to KD 12.1 million, and recording a 54 percent increase compared to the first quarter of 2016. Meanwhile, the operating income increased by 31 percent after reaching KD 7.7 million by the end of the first quarter of 2017 compared to KD 4.8 million in the same period of 2016.

The bank’s overall assets also increased to KD 1.3 billion thanks to its expansion strategy in the local and regional markets, and investing in high quality, low risk assets. The financing portfolio recorded a notable increase as well, reaching KD 971 million; up by 64 percent compared to the first quarter of 2016. This is an indication to the quality of the financing portfolio, with a default percentage of 0.6 percent, which is one of the lowest rates in the local banking sector. In the meantime, the level of allocations’ coverage for default reached 256 percent by the end of the first quarter.

Commenting on the first quarter’s results, Abdulwahab Abdullah Al-Houti, Warba Bank’s Board Chairman, said that thanks to God Almighty, the bank was able to achieve excellent results during the first quarter of 2017. This is the beginning of the bank’s developmental strategy with the goal of cementing its role as a leading bank in corporate Islamic banking services and investment in Kuwait, in addition to providing advanced digital retail services.

Profit indicators
Based on this strategy, all profit indicators increased excellently. “The great first quarter’s results reflect the bank’s exceptional performance and achievements in innovative corporate and retail Islamic banking solutions,” Houti said. “This is a promising start that brings hope for a year full of achievements, especially that the bank continues to develop its operations, invest in innovating services and products that enrich the Islamic banking sector, and expand its branches to meet clients’ demands.”

Houti also pointed out the bank’s plans to expand its global investments, saying that it will soon begin considering investment opportunities inside and outside Kuwait that will surely strengthen its investment portfolio and guarantee feasible returns for investments. He further explained that all indicators provide promising indications to the bank’s high quality performance at all levels and departments.
In addition, he noted that the bank currently plans to support the corporate and investment sector with innovative Islamic banking solutions, develop its technological infrastructure, and create new banking services in line with its ‘Distinguished by Solutions’ motto.

“The first quarter’s results matched our expectations, especially in light of the quality profits that the bank earned by the end of 2016, which reached KD 2.6 million with a 158 percent growth,” he added. “This was realized first and foremost through continuous efforts from the bank’s management and staff in accordance with the bank’s strategy to support operations through the retail and corporate sectors, including banking or financing operations.”

Meanwhile, Shaheen Hamad Al-Ghanim, Warba Bank’s CEO, said that the bank made pioneering achievements in the financing and investment sector during the first quarter, thus cementing its position as an Islamic bank that offers regular and growing investment opportunities for investors. This development comes in accordance with the bank’s strategy that aims to provide leading banking investment tools and distinguished financing services, as well as necessary support to the corporate sector, he added.

Financing and investment solutions
The first quarter witnessed a big step forward in Warba Bank’s operations, as it achieved remarkable success in marketing its $250 million sukuks, and managed to cover the subscription by 5 times more than the estimated volume of issued sukuks of $1.3 billion. The bank’s marketing tour featured stops in various regional and international markets, as the sukuks were recently listed in Nasdaq Dubai and Ireland’s stock market.

In this regard, Al-Ghanim said: “Warba Bank achieved a quantum leap in its operations during the first quarter of 2017, and marketed its sukuks with great success that adds to the bank’s achievements in addition to its contributions in earning investors’ trust.”

In addition, the bank worked during the first quarter on acquiring a new car importing and exporting facility in the United Kingdom. The irrevocable 9-million-pound long-term contract is leased to Kia Motors until 2037. Al-Ghanim said that this deal comes as part of the bank’s expansion strategy to support the Islamic banking sector and the economic sector locally, regionally, and internationally by choosing the best investment opportunities to strengthen its role in Kuwait’s Islamic banking sector.

And in line with the bank’s commitment into presenting innovative financing solutions according to the Islamic sharia to clients, Warba Bank signed a renewable agreement with Al-Mulla International Finance Company, by which the bank increases its acquired share of the bank’s financing portfolios to KD 50 million. The deal comes in accordance with the bank’s expansion strategy in the local and regional markets.

Strategic expansion
Al-Ghanim further noted that the bank opened its newest branch in Al-Shuhada area, which is the first standalone branch that applies the latest technologies in banking operations and facilitates transactions for clients, including people with special needs, who are served by a special team dedicated to handle their banking transactions. The bank continues its local expansion strategy by selecting strategic areas to increase the number of its branches that reaches 11 today, and to remain closer to its clients, Al-Ghanim added.

Digital infrastructure
Al-Ghanim explained in this context that the bank continues during 2017 to develop its digital infrastructure and improve digital banking in Kuwait. He added that during the first quarter, the bank launched an Apple Watch application that allows clients to follow up with their bank accounts and operations done via banking cards through their digital watches. Furthermore, he indicated that the bank prepares to launch new digital services designed to add more flexibility and efficiency to banking transactions done online or through smartphone apps.

Marketing campaigns
Al-Ghanim also revealed that Warba Bank launched the salary campaign earlier this year, which goes in line with its strategy that seeks to provide services that the society needs and present an integrated system of Islamic products that meet clients’ aspirations. Furthermore, the bank improved Al-Sunbula Account by increasing the number of winners to 12 each month, for prizes of up to KD 20,000. It is worth mentioning that the mentioned accounts have become increasingly popular due to the facilitations and valuable prizes they offer. The bank made sure at the beginning of 2017 to introduce improvements to both accounts that earned clients’ satisfaction.

Society comes first
Speaking on Warba Bank’s social activities during the first quarter of 2017, Al-Ghanim said that the activities included the ‘Word for Kuwait’ campaign that launched during the national holidays at the Wonder Village Festival at Kuwait International Fairground. Warba Bank’s pavilion featured various patriotic activities, including a board where visitors of the village could sign their names and show their love and appreciation for Kuwait.

Warba Bank also sponsored activities held to mark the World Sleeping Disorders Day which was organized at the Islamic Medical Center at the Sabah Medical Zone. The bank’s participation comes as part of its strategy towards developmental social responsibility, and its commitment towards public health in Kuwait.

In addition, Warba Bank took part in the career fair organized by Gulf University for Science and Technology (GUST), where a team from the bank introduced graduates to the Islamic banking’s work process, and gave them explanations about the bank’s services to encourage them to join this emerging sector.

Valuable prizes
Warba Bank’s quality performance and achievements have earned it the prestigious ‘2016 Bank of the Year – Kuwait’ award from The European. This award is a valuable addition to the series of awards that the bank has earned last year in recognition of its distinguished performance and rapid growth, and for offering innovative financing solutions and investment tools with rewarding returns for investors. Al-Ghanim noted that this award is a new addition to the series of awards that the bank has earned in 2016 due to the great achievements made by all of its business units. These awards serve as a testimony to the bank’s distinguished performance.

Al-Ghanim concluded by saying: “We promise to take advantage of the strong performance of all of the bank’s indicators during the first quarter, and use it as a platform to achieve significant results by the end of 2017. We rely in our quest to achieve this goal on our investors’ trust in the bank’s performance, and on the hard work of the bank’s team who spare no efforts to help it reach a pioneering status in reinforcing the market with unmatched financing and investment solutions in the Islamic banking sector.”

This article was published on 07/05/2017