Latest news with #Al-Sager
Arab Times
23-04-2025
- Business
- Arab Times
Al Sager: NBK Not Only Overcomes Challenges — It Transforms Them into Opportunities for a Stronger, More Sustainable Fu ture
KUWAIT CITY, Apr 23: Mr. Isam Al-Sager, Vice Chairman and Group CEO of National Bank of Kuwait (NBK), expressed unwavering confidence in the bank's ability to swiftly adapt to the evolving economic landscape, all while maintaining its leadership position in the local market. On the sidelines of the analyst conference call for the first quarter of 2025, Al-Sager stated, "We not only overcome these challenges, but we seize them as opportunities to build a stronger and more sustainable future." He emphasized that NBK continues to enhance its flexibility, investment, and technology, all while maintaining a steadfast commitment to the highest quality standards in addressing the evolving needs of its customers. He highlighted that NBK's regional and international presence remains a key factor in mitigating risks, stabilizing revenue, and improving operational efficiency. He further stressed that the Group's ongoing goal is to drive value and profitability by strengthening the integration of its businesses and expanding cross-selling opportunities across the various markets in which it operates. Al-Sager emphasized that the Group's wealth management business will continue to leverage its extensive experience in delivering a comprehensive approach to portfolio management, advisory services, and investment opportunities. Meanwhile, its Islamic banking arm, represented by Boubyan Bank, will further reinforce NBK's distinctive position in the local market and play a pivotal role in diversifying its sources of profitability. He attributed the 8.5% year-on-year decrease in the bank's net profit for the first three months of 2025 primarily to the introduction of the new Domestic Minimum Top-up Tax (DMTT), which took effect this quarter. This led to an increase in the effective tax rate to 16.3% in 1Q2025, compared to 9.2% in the corresponding period of 2024. He noted that, excluding the impact of the new tax, pre-tax profit actually saw a 0.8% year-on-year increase, reaching KD 173.4 million in the first quarter of 2025. Al-Sager stated that the Group's returns remained robust despite the impact of the new tax system, with the return on average assets reaching 1.33% in the first quarter of 2025. Meanwhile, the return on average shareholders' equity stood at 13.1%. He also highlighted that the Group's loan portfolio is strategically allocated, with 70% originating from Kuwait and 30% generated through its international presence. 'NBK reaffirms its unwavering commitment to sustainability and advancing its sustainable financial agenda. The successful issuance of the first green bonds in 2024 stands as one of the bank's most significant achievements, attracting strong interest from international investors and reaffirming the market's confidence in our ESG strategy,' Al-Sager added. He highlighted that the bank continues to make significant strides in integrating climate-related standards into its operations, with a particular focus on reducing the carbon footprint of its investment portfolio and effectively managing climate risks. He noted that these efforts align with leading international standards, strengthening NBK's role as a key player in supporting Kuwait's commitment to achieving carbon neutrality, while also reflecting its crucial role in driving the transition toward a low-emission economy. Kuwait's Economy On the performance of the Kuwaiti economy, Al-Sager stated that despite the slowdown in macroeconomic activity in 2024, the near-term growth outlook for 2025 remains optimistic. He attributed this positive outlook to several key factors, including the anticipated easing of voluntary production cuts by OPEC+, the gradual recovery of consumer spending, credit growth, the resurgence of momentum in project market activities, and the potential acceleration of public investment. He explained that, supported by these factors, Kuwait's GDP is expected to grow by 3.0% in 2025. Regarding the projects market, Al-Sager noted, 'The market experienced some slowdown in the first quarter of 2025, following a strong year of activity in 2024. The value of projects awarded in the first quarter reached over KD 400 million. However, the outlook remains promising, with projects in preparation estimated to exceed KD 10 billion, reflecting the government's strong commitment to advancing its development and reform agenda at an accelerated pace'. As for the short-term outlook for oil prices, Al-Sager remarked that as the government continues to focus on implementing its development plan, oil price fluctuations have become less impactful on capital spending. He explained that this type of spending now accounts for less than 10% of the total government budget, reducing the likelihood of significant savings should oil revenues face pressure. He also noted that the first two years of capital spending will primarily focus on addressing infrastructure gaps, with the provision of basic services to meet population growth remaining a key priority. He stated that the recently approved Financing and Liquidity Law provides the government with greater flexibility in managing its financial resources, enabling the issuance of debt instruments worth up to KD 30 billion. On the mortgage law, Al-Sager explained that several important meetings have recently been held to approve the law, including discussions with the Public Authority for Population Welfare to sign advisory service agreements with real estate developers. He indicated that the law is expected to be approved due to its strategic importance, particularly given the more than 100,000 pending housing applications and the growing population of Kuwaiti youth, which adds approximately 10,000 new applications annually. Furthermore, Al-Sager emphasized that the banking sector's strong liquidity position strengthens its ability to play a key role in addressing the housing problem in Kuwait. The GCC & The Global Economy Al-Sager pointed out that, supported by robust fiscal reserves, ambitious economic reform programs, continued progress in major projects, and strong demand, the economies of the GCC are expected to maintain relatively strong performance in 2025. However, he cautioned that tightening global financial conditions could dampen investment and trade flows, increase financing costs, and potentially lead to a decline in demand, along with volatile oil prices. Regarding the global economy, Al-Sager noted that it has recently navigated a complex environment marked by shifting monetary policies and escalating geopolitical tensions. He pointed out that the recent trade war and tariffs imposed by the US administration have cast a shadow over the economic landscape, potentially contributing to higher inflation rates and a slowdown in growth, further deepening the uncertainty surrounding the global economic outlook. Robust Operational Performance In the meantime, Mr. Sujit Ronghe, NBK Group Chief Financial Officer, stated that despite the impact of the new tax regime, the Group maintained strong operating performance in the first quarter of 2025, driven by significant growth in business activities, particularly in lending and investment. He highlighted that the operating income mix remains well-balanced, with non-interest income comprising 24% of total revenue sources. Ronghe emphasized that NBK Group's financial position remains robust, characterized by high levels of credit quality, strong capitalization, and the bank's ability to generate operating profits that enhance its capacity to absorb credit losses. He further noted that the Group continues to leverage its unique advantage among Kuwaiti banks, particularly through its broad geographical presence via a network of overseas branches and subsidiaries, along with its ability to offer both conventional and Islamic banking services. He highlighted that operating income during the first quarter of 2025 was distributed across key business segments, with overseas branches and subsidiaries contributing 26%, Islamic banking 22%, consumer banking 20%, corporate banking 12%, and NBK Wealth 9%. Ronghe further explained that overseas branches and subsidiaries accounted for 27% of the Group's net profit during the first quarter of 2025, while Islamic banking contributed 19%, corporate banking 17%, consumer banking 16%, and NBK Wealth's contribution reached 10%. He also noted that IBG and Boubyan Bank collectively contributed 44% and 23%, respectively, to the Group's total assets, reinforcing the Group's strategy of diversifying its revenue sources. Ronghe noted that the Group's loans and advances saw impressive growth during the first quarter of 2025, reaching KD 24.6 billion, reflecting a 9.9% increase compared to March 2024 and a 3.8% rise on a quarterly basis. This growth was driven by higher loan volumes in both Kuwait and international markets, across conventional and Islamic banking services. He further pointed out that, amidst the prevailing economic uncertainty, loan growth in 2025 is expected to remain in the single-digit range. However, any improvement in global conditions, a faster pace of project implementation, or the approval of the mortgage law in Kuwait could significantly boost the growth of loan activities. Regarding the recently implemented DMTT tax in Kuwait and its impact on the bank's profits for the current year, Ronghe stated: "The executive regulations of the law are expected to be issued within six months of its adoption. In the absence of detailed regulations at this stage, current estimates suggest that the effective tax rate for 2025 will range between 16% and 17% of pre-tax profits. He pointed out that the net interest margin for the first quarter of 2025 was impacted, reaching 2.45%, due to an unfavorable shift in the asset mix, along with the annual effect of the depreciation of the Egyptian pound and the decline in historically high interest rates. However, the recent approval of the Finance and Liquidity Law in Kuwait boosts expectations for the upcoming issuance of sovereign debt instruments this year, which will allow the bank to repurpose liquidity into interest-bearing assets. He emphasized the bank's capacity to provide the necessary financing for development projects currently in the pipelines, supported by its diversified and stable financing base, which aligns with NBK's strategy for sustainable growth. Regarding his outlook for the operating environment, Ronghe stated: 'Despite the prevailing uncertainty in the economic landscape, we remain cautiously optimistic that the overall operating environment, although challenging, stabilize in due course during 2025'.
Zawya
22-04-2025
- Business
- Zawya
NBK reports net profit of KD 134.1mln for 1Q2025
Al-Bahar: Once again, NBK reaffirms its agility in navigating economic shifts The Bank's strong financial performance reflects the success of its diversification strategy, solid capitalization and high-quality assets NBK is well positioned to sustain its leadership in the financial sector We are driving sustainable finance towards a USD 10 billion portfolio by 2030 Al-Sager: NBK maintains strong buffers to withstand global volatility Our diversified operations and prudent risk management ensures operational resilience Our International Operations and Boubyan Bank remain key revenue and profit growth contributors Our ongoing investments in technology and innovation fuels our inclusive and sustainable financial growth We are committed to driving Kuwait's economic growth through strategic project financing We maintain a positive outlook for projects market activity as government prioritizes development initiatives The ongoing economic reform momentum is expected to enhance Kuwait's business climate National Bank of Kuwait (NBK) has announced its financial results for the three-months period ended 31 March 2025. The Bank reported a net profit of KD 134.1 million (USD 434.8 million), compared to KD 146.6 million (USD 475.3 million) for the corresponding period in 2024. Profit before tax for the period reached KD 173.4 million (USD 562.3 million) compared to KD 172.0 million (USD 557.7 million) recorded in 2024. Total assets as of the end of March 2025 grew by 8.7 % year-on-year to reach KD 41.6 billion (USD 135.0 billion), whereas customer loans and advances increased by 9.9 % year-on-year to KD 24.6 billion (USD 79.8 billion). Customer deposits grew by 5.6 %, reaching KD 23.5 billion (USD 76.2 billion) by the end of March 2025. Meanwhile, shareholders' equity stood at KD 4.0 billion (USD 13.1 billion), reflecting a growth of 6.4 % year-on-year. Solid Results Commenting on the Bank's annual financial results, Hamad Al-Bahar, NBK Group Chairman stated, 'NBK entered 2025 on a strong note, delivering solid financial results in the first quarter despite a challenging global landscape. The performance came amid persistent geopolitical tensions on both global and regional fronts, rising concerns over a potential global trade war following recent U.S. tariff measures, and increasingly complex macroeconomic conditions across many parts of the world.' 'Once again, NBK reaffirms its resilience and adaptability to evolving economic conditions, underpinned by a well-diversified mix of products, services, and international operations across various parts of the world. This strategic positioning is supported by the Bank's strong balance sheet, solid capitalization, high liquidity, and high asset quality all reinforced by a prudent risk management approach,' Al-Bahar added. He emphasized that NBK is well-positioned to sustain its leadership in the domestic financial sector while delivering long-term value to shareholders, customers, and the communities it serves. He noted that the Bank continues to realize the benefits of its strategic investments in both technology and human capital. 'In 2025, NBK is set to accelerate its sustainable financing efforts in pursuit of its target to expand its sustainable assets portfolio to USD 10 billion by 2030. The Bank will also continue to advance a range of initiatives in support of its broader commitment to achieving carbon neutrality,' Al-Bahar confirmed. He highlighted that during the first quarter of 2025, NBK played a key role in launching and supporting a wide range of initiatives across various fields, reinforcing its position as the leading contributor to social responsibility in Kuwait. Among these efforts was NBK's annual Ramadan campaign, 'Doing Good Deeds', which featured a diverse lineup of health, sports, cultural, and recreational activities. Strong Buffers Meanwhile, Mr. Isam J. Al-Sager, NBK Group Vice Chairman and CEO, said: 'NBK's first-quarter financial results this year underscore the strength of its buffers, which have enabled it to withstand global economic headwinds and their ripple effects across regional and local markets.' Al-Sager noted that NBK's diversified business mix, strategically planned investments, and prudent risk management enabled the Bank to maintain operational flexibility across its various business segments during the first three months of 2025. This was led by the core banking business, which played a key role in mitigating the impact of an increasingly challenging economic conditions during that period. He stated that NBK's net profit for the first quarter of 2025 was impacted by the effective implementation of the Domestic Minimum Top-Up Tax (DMTT) on multinational enterprises (MNEs) operating in the country. This led to net profit recording a year-on-year drop of 8.5% while profit before tax was flat year-on-year. Al-Sager revealed that NBK Group recorded a net operating income of KD 310.7 million (USD 1.0 billion) in the first quarter of 2025, reporting a growth of 0.6 % year-on-year. He also noted that both the International Banking and Boubyan Bank, its Islamic banking arm, remain key revenue and profit growth contributors to the Group. Seizing Opportunities Al-Sager emphasized that NBK remains committed to investing in technology and fostering innovation to build an inclusive and sustainable financial future. He added that the Bank aims to expand its customer base while capitalizing on opportunities in promising markets and key sectors. He further noted that during the first quarter of 2025, NBK continued to deliver innovative solutions and services tailored to the evolving needs of its customers, showcasing its agility in keeping pace with rapid market developments. The Bank also entered into strategic partnerships with leading local and international institutions across key sectors, reinforcing its commitment to offering customers an exceptional and comprehensive banking experience. On the wealth management front, Al-Sager stated that NBK Wealth has continued to enhance its offerings by delivering a broad range of integrated solutions across private banking, asset management, financial planning, and advisory services. Supported by a wide global network of operations, these efforts have further solidified its position as the largest wealth management entity in Kuwait and among the leading players in the region. Al-Sager emphasized the Bank's commitment to actively contributing to Kuwait's economic growth and development through financing strategic infrastructure projects, ongoing support for entrepreneurs, and efforts to promote financial inclusion. He also highlighted NBK's focus on maintaining its competitive edge in the local market while continuing to grow its presence in international markets. Furthermore, he emphasized the Bank's commitment to enhancing operational efficiency across all business sectors, while reinforcing its role in supporting sustainability efforts within the communities it serves. He also highlighted NBK's dedication to being a strategic partner for customers in their pursuit of sustainable financing solutions. Operational Environment Regarding his outlook for the business environment in Kuwait, Al-Sager noted, 'Several indicators suggest a positive shift in the operational landscape for Kuwait in 2025. At the forefront is the continued momentum in awarding and implementing projects. This positive trend is expected to persist as the government focuses its economic agenda on prioritizing major development projects and accelerating their implementation in alignment with Vision 2035.' Al-Sager emphasized the government's commitment to advancing financial and economic reforms, highlighted by the recent adoption of key legislation such as the Financing and Liquidity Law (debt law) and the anticipated issuance of the mortgage law. These initiatives are expected to support economic growth and positively impact the business environment in Kuwait. However, he noted that the challenges posed by US tariffs, concerns over a potential global trade war, and ongoing geopolitical tensions will remain among the most significant uncertainties that are facing the markets in the near term. The Strongest & Most Valuable Brand NBK reaffirmed the strength of its brand in 2025, maintaining its position as the most valuable and strongest banking brand in Kuwait. According to the annual report issued by Brand Finance, NBK widened its lead over competitors in the Kuwaiti banking sector, achieving a 22% increase in brand value compared to 2024. Moreover, Global Finance recently named NBK the Best Bank in Kuwait - 2025, further solidifying its leadership in the Kuwaiti banking sector. Key financial indicators for 1Q2025 Net operating income stood at KD 310.7 million (USD 1.0 billion), up 0.6 % year-on-year Total assets grew by 8.7 % year-on-year, at KD 41.6 billion (USD 135.0 billion) Customer loans and advances increased by 9.9 % year-on-year to KD 24.6 billion (USD 79.8 billion) Customer deposits grew by 5.6 % year-on-year to KD 23.5 billion (USD 76.2 billion) Shareholders' equity amounted to KD 4.0 billion (USD 13.1 billion), registering an annual growth of 6.4 % Strong asset quality metrics, with NPL/gross loans ratio at 1.38 % and an NPL coverage ratio of 251 % Robust Capital Adequacy Ratio of 16.6 %, comfortably exceeding regulatory requirements About NBK: National Bank of Kuwait (NBK) was established in 1952 as the first national bank and the first joint stock company in Kuwait and the Arab Gulf region. NBK achieved profits of USD 1. 9 billion (KD 600.1 million) in 2024, while the Bank's total assets reached USD 130.9 billion (KD 40.3 billion) by the end of 2024, and shareholders' equity reached USD 12. 7 billion (KD 3. 9 billion). NBK is the largest conventional financial institution in Kuwait and has actual predominance in the commercial banking sector. The bank has consistently retained the highest credit ratings among all banks in the region, as affirmed by renowned global ratings agencies such as Moody's, Standard & Poor's, and Fitch. Noteworthy is NBK's extensive network, encompassing branches and subsidiaries across key global financial hubs, including China, Geneva, London, Paris, New York, and Singapore. Additionally, NBK maintains a robust regional presence in Lebanon, Egypt, Bahrain, Saudi Arabia, Iraq, and the UAE. NBK Long-Term Rating • Moody's Credit Rating: A1 • Fitch Ratings: A+ • Standard & Poor's Rating: A
