KFH holds H1 2025 earnings webcast

Kuwait Times

a day ago

KUWAIT: Kuwait Finance House (KFH) held the earnings webcast for highlighting the Group's financial performance and results during H1 2025. The webcast was attended by KFH Group Chief Executive Officer, Khaled Al-Shamlan, Group Chief Strategy Officer, Eng Fahad Al-Mukhaizeem, and Acting Group Chief Financial Officer and General Manager Investments, Planning and Reporting, Yameen Abdulsattar.
Group CEO Khaled Al-Shamlan
KFH Group Chief Executive Officer Khaled Al-Shamlan commenced the meeting by shedding light on the Bank's financial performance for H1-2025.
He said that KFH has reported a net profit to the shareholders of KD 342.1 million for H1 2025. Earnings per share reached 19.23 fils for H1 2025. Net financing income for H1 2025 reached KD 607.3 million, reflecting a growth of 8.7 percent compared to the same period last year. Total operating income also saw a significant rise, reaching KD 876 million, with an increase of 6.4 percent compared to H1 2024. Additionally, Net operating income for the first half of the year reached KD 566.7 million; an increase of 7.9 percent compared to the same period last year.
The cost-to-income ratio for H1 2025 improved to 35.3 percent compared to 36.2 percent for the same period last year. Financing receivables at the end of the first half of 2025 reached KD 20.4 billion, an increase of 7.1 percent compared to the end of last year. Total assets at the end of the first half of 2025 amounted to KD 38.5 billion, an increase of 4.9 percent compared to the end of last year. Shareholders' equity increased to reach KD 5.6 billion, and depositors' accounts totaled KD 19.7 billion an increase of 2.7 percent compared to the end of last year. The capital adequacy ratio remained strong at 18.01 percent, well above regulatory requirements, emphasizing the strength of KFH financial position.
Al-Shamlan added: 'KFH continues to lead the banking sector and the Kuwaiti market in profitability. We are proud of this achievement since it comes despite the challenging operating environment and geopolitical tension in the region. Our success stems from carefully implemented plans that ensure sustainable profits and maintain the highest financial indicators, while upholding a solid financial position and performance.' KFH is consistently enhancing its operational efficiency, increasing revenues, and optimizing its capabilities in line with global standards. This approach will improve asset quality, enhance risk management, and help the bank rationalize expenses.
Al-Shamlan mentioned: 'A key focus area has been enhancing integration across our Group banks. The KFH Group Service Center, which currently provides centralized support for our operations in Turkey and Egypt, has been instrumental in driving operational efficiencies and improving customer service. We plan to expand this model to additional markets in the near future, creating further synergies across our network.'
He pointed out that KFH brand unification strategy reached an important milestone with the successful rebranding of Ahli United Bank - Bahrain as Kuwait Finance House-Bahrain. This move complements a series of achievements realized under the new brand identity 'Beyond Horizons' across the Bank's major markets, including Kuwait, the United Kingdom and Egypt. This initiative is part of KFH's expansion strategy as a global leader in Islamic banking. This launch marks the beginning of a new chapter of integration and excellence in banking services.
In the domestic market, Al-Shamlan said that KFH continues to play a leading role in financing Kuwait's economic development. Its diverse Sharia-compliant financing solutions support projects across all sectors, from large infrastructure developments to SME growth initiatives. The Bank maintain its position as the preferred partner for major syndicated financing deals, leveraging its expertise in structuring innovative Islamic financing solutions.
He emphasized that digital innovation continues to be a key differentiator for KFH. The launch of 'Fahad', Kuwait's first AI-powered virtual banking assistant, represents a significant milestone in KFH digital transformation journey. Additionally, KFH greatly enhanced KFHOnline app, which now offers customers access to over 200 digital banking services, one of the most comprehensive digital offerings in the region. Al-Shamlan concluded: 'Looking ahead, we remain focused on executing our strategy of sustainable growth through synergies, AI Driven digital innovation, and value creation for all our stakeholders, especially our customers. Our strong financial position, diversified business model, and talented team position us well to capitalize on emerging opportunities while navigating potential challenges in the economic environment.'
Group Chief Strategy Officer Fahad Al-Mukhaizeem
Meanwhile, KFH Group Chief Strategy Officer Fahad Al-Mukhaizeem shared insights into Kuwait's economic landscape and KFH's strategic progress during the first half of the year. He said: 'Global real GDP growth is forecasted to reach 2.8 percent in 2025, down from prior estimates of 3.3 percent, with a modest recovery to 3.0 percent expected in 2026. This slowdown reflects rising trade tensions, policy uncertainty, and geopolitical risks affecting major economies like the US and China.
Al-Mukhaizeem added: 'Kuwait's economy remains robust, with real GDP growth projected at 1.9 percent in 2025, rebounding from a 2.8 percent contraction in 2024. This growth is driven by increased oil production and steady non-oil sector expansion, supported by diversification efforts and growing private sector participation. Stable sovereign credit ratings of A+ by (S&P), A1 by (Moody's), and AA- by (Fitch Ratings), underscore confidence in Kuwait's fiscal and institutional strength.
He mentioned that Kuwait's project market excelled in H1 2025, with awarded contracts surging 37.5 percent year-on-year to $3.3 billion, driven by increased investments in key sectors such as transport, power, and a revival in upstream oil projects. This momentum is expected to continue in H2 2025, as the government advances strategic projects aligned with Kuwait Vision 2035. Several high-value tenders in oil projects are in progress and anticipated to be awarded.
Al-Mukhaizeem pointed out: 'The annual Inflation Rate eased to almost 2.3 percent in June 2025 down from average of 2.9 percent in 2024, reflecting the Central Bank of Kuwait's prudent monetary policy. The Central Bank of Kuwait 'CBK' has maintained the discount rate at 4 percent, unchanged since September 2024, ensuring a balanced approach to economic stability.'
He affirmed that Kuwait's banking sector remains strong, underpinned by robust regulation and ample liquidity. KFH delivered exceptional financial results in H1 2025, driven by its diversified business model. With solid capital, innovative digital capabilities, and an expanding regional presence, KFH is well positioned to support Kuwait's long-term economic vision while reinforcing its leadership in Islamic banking.
On the innovation and technology front, KFH is dedicated to adopting innovative fintech solutions to enhance operational efficiency and customer experience. The Group is strongly committed to fostering synergy across its international branches, prioritizing seamless integration, knowledge sharing, and unified strategies to drive operational excellence and reinforce its global network. KFH continues to expand its global Sharia-compliant banking footprint, capitalizing on its regional presence post-acquisition, and seizing strategic opportunities to enhance its presence in key markets and solidify its status as a leading international Islamic financial institution.
'With the Central Bank of Kuwait issuing a draft regulatory framework for open banking, KFH is well positioned, given its digital track record and market leadership, building on its success of offering innovative services and seamless digital onboarding platforms,' commented Al-Mukhaizeem. From a legislative standpoint, the implementation of the Real Estate Developer Law is expected to boost private sector involvement in housing and infrastructure and help ease the housing backlog, while the proposed Mortgage Law is expected to streamline property processes and expand access to long-term, Sharia-compliant housing finance. These reforms foster a transparent and inclusive development model.
Al-Mukhaizeem further noted: 'Kuwait's capital market sustained strong momentum in H1 2025, with the market capitalization of all listed companies in Boursa Kuwait increasing 23.2 percent year-on-year to KD 50.5 billion and traded volume recording 25.2 billion shares in Q2 2025 nearly doubling vs Q2 2024. KFH, the largest listed company, saw its market capitalization grow by nearly 23 percent to KD 14.4 billion, reflecting strong investor confidence in its strategy and performance.
Acting Group CFO and GM Investments, Planning and Reporting Yameen Abdulsattar
Acting Chief Financial Officer and General Manager Investments, Planning and Reporting at KFH Group, Yameen Abdulsattar said that the Group has achieved Net Profit After Tax attributable to Shareholders for the six months ended June 30, 2025 of KD 342.1 million higher by 0.3 percent compared to H1 2024.
He noted that increase in net profit after tax attributable to shareholders is mainly from increase in total operating income and a decrease in net monetary loss, which is partly offset by increase in operating expenses, provision charge and taxes. Net financing income at KD 607.3 million increased by KD 48.5 million, or 8.7 percent compared to same period last year mainly due to increase in financing income by KD 47.3 million and decrease in finance cost and distribution to depositors by KD 1.3 million.
Net Operating income at KD 566.7 million increased by KD 41.3 million, or 7.9 percent compared to same period last year.
Looking at the total operating income profile, contribution of net financing income to total operating income increased from 67.86 percent in H1 2024 to 69.33 percent in H1 2025 mainly driven by an increase in net financing income.
Cost to income ratio for H1 2025 improved, representing 35.30 percent compared to 36.19 percent for H1 2024. Looking at provisions and impairments, Group total impairment charge increased by KD 7.5 million compared to H1 2024. KFH's cautious approach towards provisioning has contributed to financing provision balance exceeding ECL required as per CBK IFRS 9 by KD 494 million as of June 30, 2025. On the financial position front, Abdulsattar added that Total Assets at KD 38.5 billion increased by KD 1.8 billion, or 4.9 percent in June 2025 compared to December 2024.
Net financing receivables at KD 20.4 billion increased by KD 1.4 billion, or 7.1 percent compared to December 2024, mainly on account of increase in corporate portfolio. Deposits for H1 2025 at KD 19.7 billion have increased by KD 510 million, or 2.7 percent compared to December 2024, mainly due to increase in CASA deposits.
Looking at the funding mix, contribution of customer deposits to total funding as of June 30, 2025 is 64.6 percent followed by due to banks and FI at 30.5 percent. These results reflected growth across all key financial indicators during the period.