The Banking Executive Magazine - October Issue

Gulf Bank Gulf Bank RECORDS $131.1MLN IN NET PROFIT FOR THE FIRST NINE MONTH OF 2024 Gulf Bank K.S.C.P. announced its fi- nancial results for the first nine months ending 30 September 2024. The Bank reported a net profit of KD 40.2 million, representing a decline of KD1 4 million or 25.3% com- pared to a net profit of KD 53.8 mil- lion for the same period in 2023. Additionally, Gulf Bank recorded an operating income of KD 146 million for the first nine months of 2024, an increase of 4.2% compared to the same period of last year. Further- more, operating profit has increased to KD 78.6million, indicating a ro- bust growth of 4.5% compared to the first nine months of 2023. For the third quarter of 2024, the Bank reported a net profit of KD 12.0 million, a decline of 33.2% over the third quarter of 2023. Operating in- come for the third quarter of 2024 was KD 49.2million, an increase of 2.7% compared to the same period of last year and operating profit was KD 26.1 million, with an increase of 0.5% over the same period of last year. The decline in net profit for the first nine months of 2024 isprimarily at- tributed to an increase in total provi- sions and impairments, which increased byKD 17.6million for the first nine months compared to the same period last year. Nevertheless, the Bank remains committed to pru- dent risk management practices, building on its strong financial posi- tion to contribute and support future growth opportunities. Regarding asset quality, the non-per- forming loans (NPL) ratio was1.3% as of 30 September 2024, compared to the prior year level of 1.2%. The Bank also maintains a significant non-performing loans coverage ratio of 334% including total provisions and collaterals. As of 30September 2024, total credit provisions reached KD 275million, whereas IFRS 9 accounting require- ments (i.e., ECL or expected credit losses) were KD 175million. This re- sults in a substantial excess provision level of KD 99 million, over and above what is mandated by IFRS 9 accounting requirements. In comparison to 31 December2023, total assets increased by 4.2% to KD 7.5billion, with net loans and ad- vances risingby 6.9% to KD 5.6bil- lion.Totaldeposits also grew by 6.9% to KD 5.7billion, while total Share- holders’ equity reached KD 814 mil- lion. The Bank’s regulatory Tier 1 ratio of 14.2% was 2.2% above the regula- tory minimum of 12%, and the Cap- ital Adequacy Ratio (CAR) of16.3% was 2.3% above the regulatory min- imum of 14%. This solid capital po- sition reinforces the Bank's ability to foster long-term development while adhering to regulatory standards. PERFORMANCE AND GROWTH Commenting on Gulf Bank’s finan- cial results for the first nine months 2024, Mr. Bader Nasser Al-Kharafi, Gulf Bank’s Chairman, stated: “While the Bank’s performance dur- ing this period reflects the impact of increased credit costs, our operating profit maintains its growth trajectory momentum reaching KD 78.6 mil- lion for the first nine months of 2024 representing an increase of 4.5% when compared to the same period of last year.” He added:” The recent 50 basis point rate cut by the Federal Reserve, followed by a 25-basis point reduction in the discount rate by the Central Bank of Kuwait, rep- resents a positive step towards stim- ulating economic growth. We expect these rate cuts to help alleviate finan- cial burdens and encourage lending activity, providing us with opportuni- the BANKING EXECUTIVE 22 ISSUE 189 OCTOBER 2024