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Kuwait Times
07-05-2025
- Business
- Kuwait Times
Gulf Bank holds Q1 2025 earnings webcast
KUWAIT: Gulf Bank held its first quarter 2025 earnings webcast on Monday (May 5, 2025) to present and discuss the Bank's financial performance. The webcast was organized by EFG Hermes and presented by Waleed Khaled Mandani, Acting Chief Executive Officer of Gulf Bank, and David Challinor, Chief Financial Officer of Gulf Bank. The discussion was moderated by Dalal Al-Dousari, Head of Investor Relations at Gulf Bank. Operating environment Waleed Khaled Mandani, Acting Chief Executive Officer of Gulf Bank, commenced the webcast with key updates regarding Gulf Bank's operating environment during first quarter 2025. Mandani stated: 'Gulf Bank's financial performance in the first quarter of 2025 reflects the ongoing challenges facing the financial sector. Despite the headwinds, Gulf Bank's underlying fundamentals remain strong, supported by a resilient balance sheet, sound risk management, and a clear strategic direction.' Mandani added, 'As we reflect on our performance in the first quarter of 2025, we remain focused on delivering long-term value, despite the pressures of the macroeconomic landscape. While our financial performance was impacted by sector-wide factors, we made meaningful progress on several strategic fronts that reinforce the Bank's underlying strength and long-term direction.' He added: 'As we progress through 2025, Gulf Bank remains focused on executing its strategic priorities with discipline and resilience. In line with our long-term vision for sustainable growth, we have initiated the groundwork for the potential conversion to a Sharia-compliant institution (subject to obtaining relevant regulatory approvals), an important step aligned with our long-term vision for sustainable growth.' Gulf Bank Chief Financial Officer David Challinor Dalal Al-Dousari Margins When questioned about on the drivers of the decline in net interest margins and the outlook for Q2-2025, David Challinor, Chief Financial Officer of Gulf Bank remarked: 'In Q1 we did see downward pressure in the Bank's net interest margin. There's obviously a lot of dynamics at play but I'll start with the main driver which was the drop in income yields. Now, these were significantly impacted by asset repricing in both the Corporate and Treasury books due to the rate cuts we saw throughout the September to December period. Benchmark rates fell 25 basis points for KD and 100 basis points for USD. And over the past year we've been growing in corporate, as opposed to retail, so the asset mix has moved away from the higher margin retail business due to muted market growth in retail.' He added: 'Going into Q2, and as long as there's no reduction in benchmark rates, we'd expect an increase in net interest margin which will obviously have a positive impact on top line income and work to restore overall profitability.' Operating expenses In terms of operating expenses Challinor mentioned: 'Total operating expenses were up 7 percent or 1.5 million year-on-year. And the biggest driver of the increase was in the 'other expense' category. However, we managed to reduce costs by 2.1 million or 8 percent when compared to Q4 2024. And that was after booking various consulting costs relating to the potential merger with Boubyan, which was cancelled early in the quarter.' He added: 'Now clearly the cost-to-income ratio has stepped up in Q1, but this was primarily due to the drop in margin. And as I said earlier, I'd expect the margin to increase in Q2 so combined with relatively stable costs we should expect an improvement in the cost to income ratio from current levels.' Credit cost When asked about the credit cost and the outlook for the remainder of the year, Challinor said: 'The credit costs for Q1 came in at 10.1 million which represented a year-on-year decrease of 1.3 million or 11 percent. Now I've said several times before that the retail credit costs have been elevated, and we saw a continuation of this during Q1, as almost all the credit costs in Q1 related to retail. In terms of corporate, we're in excellent shape after the significant cleanup of legacy accounts we undertook in 2024 and we're very comfortable with the overall asset quality of our corporate book.' He added: 'In terms of the outlook, our full year 2025 guidance for credit costs was in the 60 to 70 basis point range and Q1 came in around the top end of that range. So, even though we think that retail credit costs could be elevated for some time, we still think the full year guidance is appropriate.' Loan growth When questioned about the loan growth during the first quarter2025, Challinor noted: 'We had loan growth in Q1 of 2.8 percent year to date or almost 160 million which was a strong start to the year. Although, most of the growth was booked late in the quarter which impacted margin. Like we've seen in recent quarters, all the growth was in the corporate space. And we saw more local deals being booked, which is a focus area for the Bank.' He added: 'According to the CBK data the total system grew 1.4 percent for the first quarter versus our growth of 2.8 percent. So in Q1 we've managed to double the system growth. Now, in terms of the outlook for the full year 2025 we'd guided mid-single digit loan growth, and we continue to see that as being achievable but with the potential scope to exceed it.'
Zawya
07-05-2025
- Business
- Zawya
Gulf Bank holds its first quarter 2025 earnings webcast
Waleed Khaled Mandani: Despite the headwinds, Gulf Bank's underlying fundamentals remain strong, supported by a resilient balance sheet, sound risk management, and a clear strategic direction. As we progress through 2025, Gulf Bank remains focused on executing its strategic priorities with discipline and resilience. We have initiated the groundwork for the potential conversion to a Sharia-compliant institution, subject to obtaining relevant regulatory approvals. David Challinor: We managed to reduce operating costs by 2.1 million or 8% when compared to Q4 2024. We had loan growth in Q1 of 2.8% year to date or almost 160 million which was a strong start to the year. The credit costs for the corporate loan book is in excellent shape and we are very comfortable with its overall asset quality. Kuwait: Gulf Bank held its first quarter 2025 earnings webcast on Monday 5th May 2025, to present and discuss the Bank's financial performance. The webcast was organized by EFG Hermes and presented by Waleed Khaled Mandani, Acting Chief Executive Officer of Gulf Bank, and David Challinor, Chief Financial Officer of Gulf Bank. The discussion was moderated by Dalal AlDousari, Head of Investor Relations at Gulf Bank. Operating Environment Mr. Waleed Khaled Mandani, Acting Chief Executive Officer of Gulf Bank, commenced the webcast with key updates regarding Gulf Bank's operating environment during first quarter 2025. Mandani stated: 'Gulf Bank's financial performance in the first quarter of 2025 reflects the ongoing challenges facing the financial sector. Despite the headwinds, Gulf Bank's underlying fundamentals remain strong, supported by a resilient balance sheet, sound risk management, and a clear strategic direction' Mr. Mandani added 'As we reflect on our performance in the first quarter of 2025, we remain focused on delivering long-term value, despite the pressures of the macroeconomic landscape. While our financial performance was impacted by sector-wide factors, we made meaningful progress on several strategic fronts that reinforce the Bank's underlying strength and long-term direction.' He added: 'As we progress through 2025, Gulf Bank remains focused on executing its strategic priorities with discipline and resilience. In line with our long-term vision for sustainable growth, we have initiated the groundwork for the potential conversion to a Sharia-compliant institution (subject to obtaining relevant regulatory approvals), an important step aligned with our long-term vision for sustainable growth.' Margins When questioned about on the drivers of the decline in net interest margins and the outlook for Q2-2025, Mr. David Challinor, Chief Financial Officer of Gulf Bank remarked: 'In Q1 we did see downward pressure in the Bank's net interest margin. There's obviously a lot of dynamics at play but I'll start with the main driver which was the drop in income yields. Now, these were significantly impacted by asset repricing in both the Corporate and Treasury books due to the rate cuts we saw throughout the September to December period. Benchmark rates fell 25 basis points for KD and 100 basis points for USD. And over the past year we've been growing in corporate, as opposed to retail, so the asset mix has moved away from the higher margin retail business due to muted market growth in retail.' He added: 'Going into Q2, and as long as there's no reduction in benchmark rates, we'd expect an increase in net interest margin which will obviously have a positive impact on top line income and work to restore overall profitability.' Operating Expenses In terms of operating expenses Mr. Challinor mentioned: 'Total operating expenses were up 7% or 1.5 million year-on-year. And the biggest driver of the increase was in the 'other expense' category. However, we managed to reduce costs by 2.1 million or 8% when compared to Q4 2024. And that was after booking various consulting costs relating to the potential merger with Boubyan, which was cancelled early in the quarter.' He added: 'Now clearly the cost-to-income ratio has stepped up in Q1, but this was primarily due to the drop in margin. And as I said earlier, I'd expect the margin to increase in Q2 so combined with relatively stable costs we should expect an improvement in the cost to income ratio from current levels.' Credit Cost When asked about the credit cost and the outlook for the remainder of the year, Mr. Challinor said: 'The credit costs for Q1 came in at 10.1 million which represented a year-on-year decrease of 1.3 million or 11%. Now I've said several times before that the retail credit costs have been elevated, and we saw a continuation of this during Q1, as almost all the credit costs in Q1 related to retail. In terms of corporate, we're in excellent shape after the significant cleanup of legacy accounts we undertook in 2024 and we're very comfortable with the overall asset quality of our corporate book.' He added: 'In terms of the outlook, our full year 2025 guidance for credit costs was in the 60 to 70 basis point range and Q1 came in around the top end of that range. So, even though we think that retail credit costs could be elevated for some time, we still think the full year guidance is appropriate.' Loan Growth When questioned about the loan growth during the first quarter 2025, Mr. Challinor noted: 'We had loan growth in Q1 of 2.8% year to date or almost 160 million which was a strong start to the year. Although, most of the growth was booked late in the quarter which impacted margin. Like we've seen in recent quarters, all the growth was in the corporate space. And we saw more local deals being booked, which is a focus area for the Bank.' He added: ' According to the CBK data the total system grew 1.4% for the first quarter versus our growth of 2.8%. So in Q1 we've managed to double the system growth. Now, in terms of the outlook for the full year 2025 we'd guided mid-single digit loan growth, and we continue to see that as being achievable but with the potential scope to exceed it.'
Zawya
17-02-2025
- Business
- Zawya
Gulf Bank holds its year-end 2024 earnings webcast
Waleed Khaled Mandani: Kuwait's financial system continues to demonstrate resilience, supported by stable oil prices, ambitious government initiatives toward economic diversification, and a commitment to fiscal reform. Gulf Bank plays a key role in supporting Kuwait's economic development and Vision 2035 aspirations. A key focus in 2025, will be exploring the feasibility of transforming Gulf Bank into a Sharia-compliant institution. David Challinor: The loan growth this year has been dominated by our corporate book which grew almost 10%, a significant turnaround from 2023. Our stage 2 loans further dropped to 2.8%, which is probably the lowest in the Kuwaiti banking system, and certainly the lowest Gulf Bank has seen since the introduction of IFRS 9. We will continue our cost optimization journey and are targeting a fall in the full year cost to income ratio. Kuwait: Gulf Bank held its year-end 2024 earnings webcast on Thursday 13th February 2025, to present and discuss the Bank's financial performance. The webcast was organized by EFG Hermes and presented by Waleed Mandani, Acting Chief Executive Officer of Gulf Bank, and David Challinor, Chief Financial Officer of Gulf Bank. The discussion was moderated by Dalal AlDousari, Head of Investor Relations at Gulf Bank. Operating Environment Mr. Waleed Khaled Mandani, Acting Chief Executive Officer of Gulf Bank, commenced the webcast with key updates regarding Gulf Bank's operating environment during the year 2024. Mandani stated: 'The global economic landscape in 2024 experienced considerable fluctuations. Central banks worldwide started to recalibrate monetary policies to address shifting financial conditions. However, Kuwait's financial system continues to demonstrate resilience, supported by stable oil prices, ambitious government initiatives toward economic diversification, and a commitment to fiscal reform.' Mr. Mandani added 'Against this backdrop, Gulf Bank has played a key role in supporting Kuwait's economic development and Vision 2035 aspirations. Operationally, we have achieved remarkable progress in enhancing efficiency and elevating customer experiences. A key milestone was the successful completion of Phase II of our core banking system. Our digital transformation efforts have been further reinforced by the launch of a new mobile banking application, designed to provide a secure and intuitive platform that caters to the diverse needs of our clients. In parallel, we have made meaningful progress in improving operational efficiency, which will remain integral to our strategic approach.' He added: 'Looking ahead to 2025, we remain steadfast in pursuing our strategic goals. A key focus will be the continued exploration of the feasibility of transforming Gulf Bank into a Sharia-compliant institution. Simultaneously, we will work to expand our product offerings, enhance our competitive position, and maintain our robust financial performance.' Loan Growth When questioned about the loan growth during the year 2024, Mr. Challinor noted: 'Gross loans and advances have grown 4% this year. And the growth this year has been dominated by our corporate book which grew almost 10%, a significant turnaround from 2023 where we saw a degrowth in corporate of 1%. In terms of the market growth, we saw corporate grow by around 9.3%, so we've outperformed the market.' He added: 'On the retail side, the market has been slow which is a function of the higher rate environment as the retail loans are fixed rate. Looking forward into 2025, I'd expect full year loan growth to be around mid-single digits.' Operating Expenses In terms of cost to income ratio Mr. Challinor mentioned: 'We guided at the beginning of the year that we would look to move this lower in 2024. And when you look at this ratio for the first 9 months of the year, it was in line when compared to 2023. But in Q4 we did see a step up in the quarterly costs, which meant that for the full year 2024, our cost to income ratio exceeded where it was in 2023.' He added: 'Now, looking forward into 2025 we will continue our cost optimization journey and are targeting a fall in the full year cost to income ratio, but as I said we may experience elevated levels in the other expense category for a while.' Margins Regarding margins and the impact from the recent rate cut, Mr. Challinor remarked: 'Clearly the biggest driver of margin going forward will be the timing and size of rate cuts. We've disclosed in our financial statements the impact of a 25-basis point change to our net interest income. And for our KD book this is 1.5 million and for our USD book its 1.1 million. Which gives a total of 2.6 million KD for every 25 points. And this also assumes a parallel shift across both sides of the balance sheet. So, in 2025 we will likely see further margin reductions driven by benchmark rate cuts, but to provide guidance on the quantum of such reductions, given the uncertainties around size and timing, is very difficult.' Credit Cost When asked about the credit cost and reasons behind the pickup this year, Mr. Challinor noted: 'In 2024 there's been a lot of dynamics and complexity at play when we look at the banks credit costs. However, just to recap they were higher by 13.3 million or 46% than in 2023. And our full year cost of risk was 75 basis points which exceeded the top end of the guidance we gave at the start of the year of 70.' He added: 'However, our stage 2 percentage went from 4.6% at the end of 2023 to 2.8% at the end of 2024. And not only is this the lowest the bank has seen since the introduction of IFRS 9, but it's the lowest of any bank in Kuwait. Looking forward into 2025 I think credit costs may be lower than what we saw in 2024. I'd expect the corporate book to perform better given many of the legacy accounts are now behind us, however retail may remain elevated for some time. So, on balance I think an annual credit cost in the 60-70 basis point range could be achievable.' Conversion to a Sharia compliance Mr. Challinor commented on a question regarding the potential conversion to Islamic banking by stating: 'Currently, the feasibility study is underway. Upon completion, the findings will be presented to the Board of Directors and then to the Central Bank of Kuwait. Ultimately, the decision will be brought to our shareholders at the AGM for their approval.'
