Kuwait Finance House K.s.c. · KSE:KFH
Kuwait Finance House K.s.c — Kuwait Finance House — Q3 2018 Earnings Presentation
35 slides from Kuwait Finance House K.s.c's earnings presentation, Oct 29, 2018
Slide 1: Disclosure of KFH Analysts Conference Q3 2018
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Slide 2: Q3 2018 Earnings Webcast Transcript
Third Quarter 2018 – Kuwait Finance House Earnings Webcast Transcript Monday, October 29, 2018 Time: 14:00 Kuwait Time Transcript of Kuwait Finance House earnings conference call which took place on October 29, 2018 at 14:00 Kuwait Local Time. Speakers from Kuwait Finance House executive management:
Slide 3: Webcast Transcript Starts
- WEBCAST TRANSCRIPT STARTS - Fawaz Al Sirri: Good afternoon ladies and gentlemen and welcome to this Kuwait Finance House webcast. This call is live on October 29, 2018 to review and discuss the Bank’s earnings for the nine months ending September 30, 2018. My name is Fawaz Al Sirri. I’m the modera
Slide 4: Fahad Al Mukhaizeem opening remarks
Fahad Al Mukhaizeem: Thank you Fawaz and good afternoon ladies and gentlemen. We are glad to welcome you to the Third quarter 2018 earnings call for Kuwait Finance House Group. I am Fahad Al Mukhaizeem – Group Chief Strategy Officer with you. Today, we'll be covering highlights of the Kuwait operati
Slide 5: Mazin Al Nahedh: Q3 2018 performance
latest development in the digital world and the financial technology for serving our customers. With this let me hand over the mic to our Group CEO, Mr. Mazin Al-Nahedh. Mazin Al Nahedh: Thank you Fahad. Good day ladies and gentlemen. It's my pleasure to welcome you all to our Third Quarter 2018 ear
Slide 6: Leadership in Sukuk market
KFH enjoys a leadership position in the Sukuk market and the Islamic financial services in general. The vast experience of KFH Group in the Sukuk issuance has positioned it as a trustworthy and highly recognized organization by major corporates and governments globally. Just to give you a flavor for
Slide 7: Shadi Zahran: Financial results
Regarding the topic of the potential Merger with AUB, we have disclosed to the regulatory authorities and the market the latest developments in this regard and there are no further updates at this time. All these disclosures were published via the official website of Boursa Kuwait and any new develo
Slide 8: Non-financing income and operating expenses
In the next slide you will note the decrease in total Non-Financing Income from KD 202.1mn to KD 184.8mn, was mainly due to the lower investment income by KD 35.2mn as mentioned (actually dropped from KD 88.2mn to KD 52.9mn). On the other hand, the increase in Net gain from foreign currencies by KD
Slide 9: Average profit earning assets and margin
Now in the next slide we look at the Average Profit Earning Assets is up by 6.3%, although the total assets / total balance sheet declined by 0.3% illustrating an increase in yielding assets contribution trend. This is also an evidence of efficient balance sheet that focuses on sustainability of ear
Slide 10: Total assets, financing receivables and deposits
In the next slide, the Total Assets as you see is stood at KD 17.3bn marginally decreased by KD (50)mn or (0.3)% over a 9 month period (9M18 vs. FY17). And that’s because of TL devaluation. The growth as Mr. Mazin mentioned, without TRL devaluation is 4.3 % (impact of KD 0.8bn). Similarly we have fo
Slide 11: Quarterly profit and cost-to-income ratio
increase in total operating income by KD 17.9mn or 9.8% and decrease in operating expenses by KD (2.3)mn or (3.3)%. Profit attributable to shareholders for Q-3 2018 standalone was higher by KD 22.6mn or 44.2% increase as compared to Q-2 2018 and by KD 29.9mn or 68.1% as compared to Q-1 2018. It wort
Slide 12: Q&A: Provision cost and Turkish operations
mitigation factors employed by the management including robust underwriting criteria and diversification of portfolio in both sector and currency within KTPB. Further diversification of portfolio is improving further by expansion of KT Germany operations. In the other side if some one is interested
Slide 13: Q&A: AUB merger and capital adequacy
Thank you. We have two more questions to go through but before we do. We also have questions about KFH and the potential merger with AUB ... Mazin Al Nahedh: It think we covered that in the presentation, there is nothing new in this regard. Anything that will come up we will be disclosing. Fawaz Al
Slide 14: Webcast Transcript Ends
Fawaz Al Sirri: Thank you Shadi, and thank you Mazin, and thank you Fahad for answering these questions and also for your detailed presentation. We will now conclude today’s call. As a reminder for our audience, a live recording of this call will be available on the same link used to access this liv
Slide 15: Q3'18 Earnings Presentation
Q3’18 Earnings Presentation October 29, 2018 © Kuwait Finance House, 2018. !1
Slide 16: Disclaimer
Disclaimer IMPORTANT NOTICE This presentation has been prepared by Kuwait Finance House and is subject to the applicable laws and regulations in the State of Kuwait. It is for information purposes only and it shall not be reproduced or redistributed to any other person without obtaining Kuwait Finan
Slide 17: Kuwait Economic Indicators
Kuwait Economic Indicators 40.00 30.00 20.00 K 27.529.431.133.534.935.4 Monthly Growth Rate - Right 2013 2015 2017 Development of Discount rate by Kuwait’s GDP & Central Bank of Kuwait Current Account Balance % % USA Federal Reserves increased the interest rate 4 times without effecting 3 interest r
Slide 18: KFH Overview
KFH Overview Kuwait Regional Global 1st Safest 1st and largest Islamic Financial Islamic bank in Shari’a-compliant Institution in the GCC* Germany bank in Kuwait *According to Global Finance !4
Slide 19: KFH Overview: Geographically diversified banking group
KFH Overview Geographically diversified banking * group 60 Branches Kuwait • Retail Banking • Wealth Management and 4 Branches Private Banking Germany • Corporate Banking • Investment Services 1st Islamic bank • Real Estate • Retail Banking Turkey • Corporate Banking • Investment Services 402 Branch
Slide 20: KFH Strengths
KFH Strengths Robust Leading Strong Professional Strategic Effective Risk Financial Islamic Financial Government Management Distribution Management Performance Institution Sponsorship Team Channels Framework A consistent track Second largest 48% ownership by Well-rounded human Diversified KFH contin
Slide 21: Business Highlights
Business Highlights Products and Services Key • Launched a new banking product Visa Credit Card (Signature) with unique advantages at market level. Activities • Inaugurated the opening of two banking halls in to serve Ruwaad, Tamayuz and Nukhba customers. Awards • KFH named as the “Safest Islamic Fi
Slide 22: Q3'18 Financial Highlights
Q3’18 Financial Highlights Net Profit Total Financing Income Net Financing Income for Shareholders KD 169.1 m KD 636.5 m KD 404.8 m +22.7% +17.4% +25.4% Cost to Income Ratio EPS (fils) 37.7% 27.0 Improved by 3% +22.6% !8
Slide 23: KFH Strategy
KFH Strategy KFH’s main focus is on core banking business activities. KFH’s 3-year strategy ending in 2020 is based on three main pillars Simplify experience Digitize operations Grow business Across all three main business sectors Retail Corporate Private !9
Slide 24: Q318 Operating Performance
Q318 Operating Operating Income Profile Performance (KD mln) Investment Income Non-Financing Income Net Financing Income 9.0% 16.8% Net Profit Operating Net 22.4% for Shareholders Income Financing 21.7% Income +22.7% +12.3% +25.4% 169.1 589.6 404.8 525.1 68.7% 322.9 61.5% 137.9 9M-17 9M-18 9M-17 9M-
Slide 25: Q318 Operating Performance: Non-financing income and expenses
Q318 Operating Investment Income as % of Performance Non-Financing Income 43.6% Non Financing Total Operating 9M-17 Income (KD mln) Expenses (KD mln) Other income Depreciation and amortization 28.6% Net gain from foreign currencies Other operating expenses Investment income Staff cost 9M-18 Fees and
Slide 26: Q318 Operating Performance: Margin and provisions
Q318 Operating Operating Profit – Banks / Non- Performance Banks Actual / Average Profit Earning Net Financing Non-Banks Assets (KD bln) Margin 7.4% 3.3% +6.3% 2.7% 2.8% 9M-17 Banks 9M-17 Q4-17 9M-18 92.6% Average Actual 13.8 Provision and Others Non-Banks 13.7 Impairment (KD mn) Financing 13.6 13.6
Slide 27: Q318 Operating Performance: Assets, deposits and funding mix
Q318 Operating Performance Total Assets Depositors’ Financing Funding Mix (KD bln) Accounts Receivables Sukuk Payable Due to Banks & Financial Institutions (KD bln) (KD bln) Depositors' Accounts -0.3% -0.8% -0.5% 3.6% 3.5% 3.2% 17.4 17.6 17.3 11.9 9.6 11.6 9.2 9.2 15.6% 16.2% 18.1% 11.5 80.8% 80.3%
Slide 28: Q3'18 Operating Performance: Returns and capital adequacy
Q3’18 Operating Performance Return on Return on Capital EPS (fils) Average Equity Average Assets Adequacy Ratios 1.5% 12.5% 17.9% 17.8% 36.0* 17.1% 1.3% 16.7% 29.5 10.2% 16.3% 9.3% 16.3% 16.0% 26.5 8.4% 1.1% 15.4% 15.4% 23.4 1.0% 14.8% 20.3 7.3% 0.9% CAR Tier 1 '14 '15 '16 '17 9M'18 '14 '15 '16 '17
Slide 29: Q&A
Q&A !15
Slide 30: Investor.relations@kfh.com
Investor.relations@kfh.com !16
Slide 31: Appendix
Appendix !17
Slide 32: Q3'18 Consolidated Financials
Q3’18 Consolidated Financials Consolidated Statement of Income (KD million) Sep-18 Sep-17 Consolidated Statement of Financial Position (KD million) Sep-18 Sep-17 Cash and balances with banks and financial institutions 1,266 1,229 Financing income 636 542 Short-term murabaha 3,140 2,947 Financing cos
Slide 33: Q3'18 Key Performance Indicators
Q3’18 Key Performance Indicators Key Performance Indicators Sep-18 Sep-17 Return on Average Assets (ROAA) 1.5% 1.2% Return on Average Equity (ROAE) 12.5% 10.2% Cost to Income 37.7% 40.6% Earnings Per Share (fils) 27.0 22.1 Key Performance Indicators Sep-18 Sep-17 CET1 Ratio 15.1% 14.6% Tier 1 Adequa
Slide 34: Consolidated Statement of Financial Position
Consolidated Statement of Financial Position Consolidated Statement of Financial Position (KD million) 2014 2015 2016 2017 Cash and balances with banks 1,604 1,600 1,495 1,262 Short-term murabaha 3,222 3,194 2,877 2,925 Financing receivables 8,090 8,095 8,176 9,216 Investments in sukuk 857 807 1,100
Slide 35: Consolidated Statement of Income
Consolidated Statement of Income Consolidated Statement of Income (KD million) 2014 2015 2016 2017 Financing income 678 695 718 741 Financing cost and distribution to depositors 278 263 283 296 Net Finance Income 400 432 435 445 Investment income 136 108 79 107 Fee and commission income 92 79 89 97