The Chief Executive Officer of the Commercial Bank of Kuwait, Elham Yousry Mahfouz, confirmed that the bank’s focus is on expanding in the local market, whether in corporate or individual services, but it also provides external lending and financing services through partners without opening branches abroad.
“Our interest is, and will continue to be, in granting loans to companies and individuals in Kuwait,” she added in an interview with Reuters.
She explained that the bank carries out financing operations abroad through “joint loans” with foreign banks, and also grants loans to foreign companies operating in Kuwait or having partners operating in Kuwait.
She indicated that the bank’s interest in the corporate sector is focused on financing contracting and commercial activities, as these activities represent more than 50% of the bank’s corporate portfolio, indicating that the bank grants loans for real estate financing, but in a “conservative” manner, and also finances “on a small scale” companies. She works in the field of stock exchange trading.
The CEO said that there are no non-performing loans currently with the bank and therefore there are no provisions for them, and the executive management is committed to implementing the policy approved by the bank’s general assembly in December 2018 and requires the executive management to eliminate non-performing loans.
Risk consideration
She explained that the bank is keen in new loans to take into account the element of risk and not to focus on expanding the portfolio or making a profit only, and over the four years of 2009 it “cleaned the budget” from non-performing loans until it reached its current position.
The Commercial Bank obtained the approval of the Capital Markets Authority in July to establish a program to issue support bonds with a value not exceeding 100 million dinars ($324.87 million) within the second tranche of capital, and the authority also approved the issuance of the first tranche of the program with a value not exceeding 25 million dinars. .
Yesterday, Sunday, the bank announced that it had obtained final approval from the Central Bank of Kuwait to issue bonds.
Elham said that the issuance of bonds will be in tranches “according to the bank’s needs.”
Great profit growth
The Commercial Bank achieved net profits of 69.19 million dinars in the first half of 2023, compared to 43.95 million dinars a year ago, an increase of 57.4%, and attributed this increase to the increase in interest revenues and refunds against the provisions that had been made in previous periods.
In April, the Commercial Bank obtained 14.3 million dinars from the Distinguished Choice Company for General Trading and Contracting, in exchange for the company obtaining its share of 50.5 million shares in Boubyan Bank, which was the subject of a dispute for years before the court decided it in 2022.
She said that the bank benefited, like other banks, from the high interest rate in the first half, and also benefited from the sum of money paid by the distinguished selection company.
Thirst for business
She confirmed that the Commercial Bank seeks to continue achieving profits based on its operations in the second half of 2023.
Kuwaiti companies and banks are awaiting the launch of new government projects, in light of rare harmony between the government and Parliament, after disputes between the two sides hindered many projects in the past, as well as the implementation of economic reform plans.
She said that the bank is waiting to launch more projects, especially in the infrastructure sector, and banks are waiting to participate in such projects, “because we are all hungry for business.”
