The Banking Executive Magazine - October Issue

Gulf Bank ties to support our customers and contribute to economic recovery. Al- though challenges persist, we are confident that this development will create favorable environment for im- proved performance in the upcom- ing quarters.” Mr. Waleed Khaled Mandani, Gulf Bank Acting CEO, commented on the current credit costs and provi- sions at Gulf Bank, stating: “Our credit profile has demonstrated con- siderable resilience this quarter, largely attributed to the resolution of selected non-performing legacy cor- porate accounts.This proactive ap- proach has allowed us to continue to maintain one of the lowest Stage Two loan ratios in the local banking sec- tor, reflecting our commitment to a sound risk management framework and a robust asset quality.” FINANCING OPPORTUNITIES Mr. Mandani, emphasizedon the sig- nificant advancements in Kuwait’s project development landscape and itspositive impact on the banking sector, particularly in the corporate space. He stated: “Recent develop- ments in Kuwait's project landscape have led to strong growth incapital spending within the infrastructure and energy sectors, presenting signif- icant opportunities for the banking industry. In its 2024-2025 fiscal budget, Kuwait has planned total ex- penditure worth of KD 24.6 billion of which 9.3% is allocated for capital expenditure. In 2024, major an- nouncements were made related to transportation and construction proj- ects, with a multimillion worth of contracts already awarded this year, particularly within sectors like en- ergy, infrastructure, and residential developments.” Mr. Mandani added:” These large- scale infrastructure investments will drive demand for corporate lending and financing solutions, creating av- enuesfor banks to engage in funding and advisory roles. At Gulf Bank, we are well-positioned to support these initiatives, leveraging on our robust financial capabilities and corporate expertise to participate in these in- vestments. We are committed to playing a pivotal role in financing Kuwait’s future growth ambitions, ensuring that we provide flexible and customizedbanking and advisory services meeting the diversebanking needs of ourstakeholders.” MERGER WITH BOUBYAN BANK Gulf Bank has been actively pursuing strategic initiatives to enhance its growth and shareholder value. On 11 June 2024, the Bank’s Board of Directors approved the engagement of an international consultant to con- duct a feasibility study on converting Gulf Bank into a Sharia-compliant institution. This decision, made in alignment with Central Bank of Kuwait (CBK) guidelines, reflects the Bank’s commitment to exploring new avenues for development in compliance with Islamic principles. Subsequently, on 30 July 2024, Gulf Bank’s Board approved a proposal for a potential merger with Boubyan Bank. The proposed merger aims to create a unified entity compliant with Islamic Sharia, with the intent of ex- panding the Bank's reach and capa- bilities. Gulf Bank promptly initiated the necessary feasibility study and due diligence, as per the CBK's reg- ulatory framework. The Bank’s com- munication with Boubyan Bank has since progressed, culminating in the signing of a Memorandum of Under- standing (MOU) between the two in- stitutions, which was disclosed on 17 September 2024. This MOU lays the groundwork for independent assess- ments of the merger, ensuring that any actions taken are in the best in- terest of both banks' shareholders and investors, while adhering to reg- ulatory requirements. In the most recent disclosure regard- ing the merger, Gulf Bank has an- nounced the CBK approved consultancy firms that will be carry- ing out the feasibility study and due diligence for the merger including Goldman Sachs as the Investment Consultant, PricewaterhouseCoopers as the Financial and Tax Consultant, International Counsel Bureau as the Local Legal Consultant, and Fresh- fields Bruckhaus Deringer as the In- ternational Legal Consultant. Throughout this process, Gulf Bank remains fully committed to comply- ing with all applicable regulations and obtaining the necessary ap- provals from the CBK and other reg- ulatory bodies. The Bank will continue to update its shareholders and the market on any material de- velopments as they arise. CREDIT WORTHINESS Gulf Bank continues to be well rec- ognized internationally in terms of its credit worthiness and financial strength by international credit rating agencies for its sound capitalization, improving profitability and strong asset quality. As of 30thSeptember 2024, Gulf Bank has an affirmed ‘A3’ Long-Term Deposit Rating and ‘Posi- tive’ outlook from Moody’s Investor Services. In addition, The Bank has an affirmed Long-Term Issuer Default Rating at 'A' with a ‘Stable’ Outlook and a Viability Rating of 'bbb-' by Fitch Ratings. Moreover, Gulf Bank has also an affirmed Long-Term For- eign Currency Rating of ‘A+’ with a ‘Stable’ Outlook from Capital Intelli- gence Ratings. APPRECIATION Mr. Al-Kharafi concluded his remarks by stating: “Looking ahead, we are confident in our ability to achieve sustainable growth, driven by our strategic discipline, along with our commitment to innovation, strong fi- nancial performance, and a cus- tomer-centric approach.” He added: “On behalf of the Board of Directors, I would like to thank our sharehold- ers for their ongoing trust, and our employees for their commitment and dedication. I would also like to thank the Regulatory Authorities for their continuous support. Finally, I want to thank our customers for their loyalty and reiterate our commitment to of- fering them the best banking experi- ence.” ISSUE 189 OCTOBER 2024 the BANKING EXECUTIVE 23