- NBK achieved exceptional results in 2022, thanks to our geographical diversification, solid financial position, and digital excellence.
- NBK launched its re-envisioned ESG strategy in 2022.
- Our strong dividend distributions reflect our commitment to creating long-term shareholders’ value.
- NBK’s record profit is a testament to the resilience of our business model and successful strategy in promoting sustainable growth.
- Our operational performance confirms our ability to strive throughout various economic cycles.
- Since our establishment, we have been dedicated to supporting the national economy and financing development projects, with a focus on promoting economic growth.
- Our sustainability journey has been marked by significant strides, and we remain resolute in our commitment to promoting a carbon-free economy.
- Our international operations remain a valuable source of risk management and income stream diversification.
- In 2022, we remained committed to maintaining our dominant market position and offering unparalleled banking experience.
- Our strategy to leverage data analytics and artificial intelligence will be expanded to exceed our customers’ expectations.
- We have taken a balanced approach to increasing revenues from various streams to improve group profitability and create benefit for all stakeholders.
- Our focus in 2023 will be on increasing investments in the development of our digital capabilities to drive operational efficiency.
- Despite operational challenges, NBK’s brand name inspired confidence and trust among customers and helped maintain the bank’s dominant market share.
- We are well positioned to capture financing opportunities in Kuwait’s infrastructure project market.
- Weyay Bank’s customer acquisition rate has exceeded all expectations, resulting in the expansion of our youth customer base.
- We are transferring our digital expertise to our international branches across the Group.
- We have demonstrated our commitment to fulfilling our social responsibilities by making social contributions that can set an example for other companies in the private sector to follow
National Bank of Kuwait (NBK) held on Saturday, 18 March 2023, its Annual General Meeting (AGM) for 2022 with a quorum of 71.47%. The AGM approved the Board of Directors’ recommendation to distribute 25% cash dividend to shareholders (25 fils per share) for the second half of the financial year, bringing the total cash dividend distributions to 35% (35 fils per share). Moreover, the AGM also approved the distribution of 5% bonus shares (5 shares for every 100 shares owned).
Mr. Hammad Al-Bahar, NBK Group Chairman, delivered his speech to attendees of the AGM and reported that in 2022, NBK achieved exceptional results thanks to its geographical diversification, digital excellence, and solid financial position. “Our constant revenue growth can be attributed to those essential components and our consistent adherence to prudent policies over the years. This is evident in the exceptional quality of our assets and our strong capitalization.,” Al-Bahar said.
Al-Bahar highlighted that NBK’s stellar financial results were founded on the Group’s strategies built upon striking a balance between long-term investments and meeting current financial commitments, to overcome today’s challenging economic environment.
“The Board of Directors has recommended the distribution of over half of the Bank’s profits for this year. This decision signifies that our commitment extends beyond generating wealth for our shareholders, and demonstrates our desire to reinvest our earnings into various sectors of the economy, maximizing the benefits for a wider range of stakeholders and positively impacting the national economy,” Al-Bahar added.
He explained that these distributions were consistent with the Group’s long standing cash distribution policies. Over the past ten years, NBK distributed KD 1.8 billion in cash dividend, in addition to KD 3.2 billion in bonus shares.
“Over the years, we have increased investments behind NBK brand and sustained our leadership among the top five banking brand names in the region,” Al-Bahar confirmed.
Al-Bahar stated that 2022 marked a transition in the Group’s sustainability journey, re-imagining its focus to proactively embed ESG across all operations. “The Group’s new ESG strategy is designed to reinforce what it means for us to be a trusted leader in this dynamic world,” Al-Bahar said.
“Our strategy focuses on promoting economic prosperity and serving as a model for sustainable development, aligned with the dynamic market conditions and our stakeholders’ expectations,” he added.
Meanwhile, Mr. Isam J. Al-Sager, NBK Group Vice Chairman and CEO, outlined in his speech that in 2022, NBK recorded the highest profits in its 70-year history, owing to strong operational and financial performance, confirming the resilience of its business model and successful strategy in promoting sustainable growth.
“This year, the Group recorded net profits of KD 509.1 million, up 40.5% year-on-year, as we continued to further solidify our financial growth trajectory, with total assets growing by 9.3% year-on-year to reach KD 36.3 billion, thanks to the accelerated growth of our credit and investment portfolios. In the meantime, we maintained the highest asset quality, keeping the Bank’s ratio of non-performing loans to gross loans at 1.42%, while the loan loss coverage ratio stood at 267%, reflecting the conservative provisioning policy of the Group, while maintaining a capital adequacy ratio of 17.4%, way above the minimum regulatory requirements,” Al-Sager said.
Al-Sager pointed out that the global economic scene in 2022 was progressively unwelcoming as economic issues began to emerge. Several shocks have hit a world economy already weakened by the COVID-19 pandemic, including a worse-than-expected slowdown in China, geopolitical tensions caused by the Ukraine war, and higher-than-expected global inflation in the developed world that reached historical highs, unabated by the tight monetary policy stance.
“Despite those challenges, the orderly implementation of NBK’s strategic objectives has paved the way for consistent and long-term profitability. Our diversification strategy, balanced business model and our commitment to a disciplined approach to risk management demonstrate our ability to thrive throughout various economic cycles,” Al-Sager stated.
Al-Sager emphasized that among the Bank’s most essential strategic objectives is to maintain NBK’s leadership and excellence in providing digital banking services. “We prioritize the integration of digital innovation into all of the Group’s business operations to provide the latest banking solutions with utmost flexibility and efficiency,” Al-Sager explained.
Al-Sager also stated that these efforts culminated in the launch of the new and improved NBK Mobile Banking App. In the meantime, Kuwait’s first digital bank, “Weyay,” is attracting new customers at exceptional rates, while “SmartWealth,” launched in partnership with NBK Capital, offers a variety of investment solutions.
“In 2022, NBK received 13 digital awards from Global Finance, including five regional designations, in addition to being recognised as the best Financial Innovation Lab, while Weyay received the “Outstanding Innovation in Mobile Banking” Award for 2022,” Al-Sager said.
“We continue to expand our international operations, by targeting continued growth and increasing our share in our core markets. In addition, we have made investments in our wealth management operations to facilitate growth. Our global wealth management platform offers a comprehensive range of solutions designed to achieve long-term investment goals while enriching customer experiences and growing their wealth,” Al-Sager added.
“In line with our leading role in supporting national economy, we aligned our strategic goals with Kuwait National Development Plan (KNDP) and continued to provide the required financing for mega projects. Since the launch of the government’s “Vision 2035”, NBK played a key role in advancing the development agenda, as we continued to lend our diverse expertise to support the State’s strategic directives, particularly in the area of digital transformation,” Al-Sager noted.
Al-Sager also highlighted that the Group’s strategic focus is to maintain its leadership and excellence in providing the latest digital banking services, with the Bank continuing to engrain digital innovation into all of its operations and provide the most up-to-date banking solutions to ensure unparalleled flexibility and efficiency.
“We launched our Sustainable Financing Framework and continued to disclose the environmental impact of our operations through the Carbon Disclosure Project (CDP), receiving a score of ‘C’, one of the highest scores in the GCC. We are also the only financial institution that submitted this disclosure in Kuwait, further solidifying our commitment to continue improving our environmental performance and accelerating our transition towards a low carbon economy and net zero emissions,” Al-Sager confirmed.
Last year, NBK announced its commitment to become carbon neutral by 2060 to support Kuwait’s strategic initiative to drive environmental and socio-economic prosperity.
“Moving forward, we will continue to implement our successful business model, which focuses on maximizing value for all stakeholders. We will continue to prioritize achieving sustainable growth, making strategic investments, enhancing our contributions to the transition to a low-carbon economy, providing innovative products and services, expanding our digital capabilities, promoting equality and community development, and maintaining our leadership role in effectively contributing to the development of Kuwait’s economy,” Al-Sager concluded.
On the sidelines of the AGM, Ms. Shaikha K. Al-Bahar, NBK Deputy Group CEO highlighted that NBK’s performance last year reflected the Group’s diverse business model and prudent approach to risk management, as well as the significant progress in executing its customer-centric strategy.
Al-Bahar emphasised that throughout 2022, NBK continued to build positive momentum across various business pillars, including achieving strong levels of capitalization and high credit quality, as well as strengthening the Bank’s relationships with its customers, thereby increasing the volume of its operations, adding that these factors will strengthen the Group’s performance going into 2023 and will create long-term added value for all shareholders.
“Throughout 2022, NBK prioritized expanding its business activities to cater to a wide range of customers while also improving the quality of its service. Moreover, the Bank placed emphasis on enhancing customers’ experiences, as it is a crucial element in helping customers achieve their financial,” Al-Bahar said.
Al-Bahar indicated that NBK’s aims to maintain its commitment to providing an unparalleled banking experience while operating at maximum efficiency. To achieve this goal, the Bank plans to expand its market share by offering customers a wider range of financial alternatives and value-added services.
Al-Bahar explained that during the past year alone, NBK added over 84,000 new customers to its network in Kuwait, including its digital channels.
She also highlighted that to create added value for all stakeholders, NBK has adopted a balanced approach to increasing revenue from various sources. The Group aims to improve its profitability by maintaining its leading position in core business activities while expanding non-core business activities to enhance profitability.
Al-Bahar outlined that in 2022 the International Banking Group (IBG) delivered a robust and flexible performance, as it effectively managed to enhance its balance sheet and optimize profits while maintaining its credit portfolio and financing base diversity.
This approach, according to Al-Bahar, bodes well for NBK’s future growth, since international operations and Islamic banking activities contributed significantly to the Group’s net operating revenues in 2022, accounting for about 26% and 21%, respectively.
Al-Bahar highlighted that the Group continued to focus on its diversification strategy and strengthened its presence in the global markets through the development of business sectors in the core markets, with a special focus on Egypt and the GCC, stressing that going forward, IBG will focus on cross-selling opportunities to achieve group-wide synergy.
“Our Assets under Management (AUM) continue to grow consistently as a result of the good momentum of our inflows, with our primary growth market, KSA, surpassing USD 1 billion in Assets under Management since inception,” Al-Bahar stated.
Al-Bahar also indicated that NBK has invested in wealth management operations to enhance growth, stating that the global wealth management platform has evolved into a comprehensive set of wealth management solutions to achieve long-term sustainable investment goals through a strategy focused on enriching customer experiences and growing their wealth sustainably.
Al-Bahar affirmed that NBK is committed to enhancing its digital capabilities to deliver an exceptional and unparalleled banking experience to its customers. This involves offering cutting-edge financial solutions, introducing new banking services, and continuously updating the NBK Mobile App, which is regarded as one of the top banking applications in the industry. Moreover, the Bank utilizes data analytics, artificial intelligence, and machine learning in various products and services to optimize customer engagement and provide a personalized experience that surpasses their expectations.
Al-Bahar also pointed out that NBK plans to make significant investments in cultivating its digital culture to enhance operational efficiency, elevate customer experiences, and deliver a cutting-edge digital banking experience. These factors will help maintain the Group’s reputation for excellence and its competitive advantage in the dynamic FinTech landscape.
Al-Bahar highlighted that NBK launched NBK RISE—a women-led leadership initiative designed by women for women – to bring together corporate entities and female executives to elevate women in the regional and international workplace. “We have come a long way in promoting women’s empowerment and raising female labor force participation,” Al-Bahar said.
Al-Bahar also highlighted NBK’s efforts to attract and retain female talent. As a result, NBK has achieved a women participation rate of 43.6% and increased the number of women in management to 29.2%. These efforts include various initiatives and advanced training programs to support and empower women.
Following the AGM, Mr. Salah Y. Al-Fulaij, Chief Executive Officer – Kuwait, stated that the business environment in Kuwait has greatly improved as business activities have normalized and post-pandemic pent-up demand has continued to support consumer spending, in addition to higher oil prices, which have boosted business confidence and positively reflected on credit growth.
“NBK maintained its digital dominance over its peers, as evidenced by the rapid growth in NBK Mobile Banking customers, as it accounted for 64% of total NBK Mobile Banking users,” Al-Fulaij said, citing the Personal Banking Services Group’s success in capitalizing on the momentum of consumer spending and operations throughout the year, as well as following a strategy that takes into account offering ample choice to customers to choose from an array of products and services that suit their needs and lifestyles.
Speaking of Weyay Bank, Kuwait’s first and only digital bank, Al-Fulaij noted that it successfully extended its reach to a broad population of youth, with the bank’s clients tripling in 2022 compared to earlier forecasts at the time of its inception. He said that “Weyay” is a key pillar in NBK’s goal to preserve its digital leadership by offering new solutions that cater to the lifestyles of the younger client base while effectively competing with growing FinTech disruptors.
Al-Fulaij explained that despite challenging market conditions, the Corporate Banking Services Group has remained committed to supporting its clients and enhancing its strategic relationships, with a focus on improving client experiences and leveraging its capabilities to deliver the best financial solutions possible. The Corporate Banking Relationship Model has proven successful in maintaining NBK’s position as Kuwait’s leading corporate bank.
“The Group successfully managed to capture new business opportunities in numerous industries, particularly oil and gas, as the industry started to witness some consistent growth toward the end of 2022 on the back of higher oil prices,” Al-Fulaij noted.
“With the persistent supply chain bottlenecks and the unprecedented rise in global inflation, smart management of cash and treasury systems has become more important than ever. The Treasury Group continued to improve its technologies and infrastructure to reduce costs while providing the best services to its customers. Furthermore, the development of the Treasury Group’s strong digital foundation has allowed NBK to manage liquidity more efficiently and accurately, as well as hedge against the risks of foreign exchange exposure. As a result of these efforts, the Group was crowned Kuwait’s Best Bank for Treasury and Cash Management,” Al-Fulaij added.
A Role Model
The year 2022 was a milestone for CSR excellence, as NBK’s initiatives gained momentum, expanding the number of activities, their nature, and the sectors they cover. This was further reinforced by increasing the value of NBK’s investments, initiatives, and charitable donations during the year, which stood at KD 23 million, up by more than 45% year-on-year. Throughout the year, NBK launched and sponsored various CSR programs with a special focus on health care and education. Last year, NBK generously donated KD 13 million to add a new extension to NBK Children’s Hospital. It also launched “Bankee” financial literacy program in schools to support the education system and improve students’ academic achievement.
Al-Fulaij expressed appreciation for NBK’s employees and their dedication, recognizing them as a key factor in NBK’s success. “NBK’s exceptional operational and financial performance would not have been possible without the support and devotion of our highly skilled human capital, which is one of the most significant contributors to our success,” Al-Fulaij said.
The Human Resources Department has continued to establish the groundwork for a positive work environment, paving the way for employees to provide their best work, devote more effort, and increase their innovation. In 2022, the Group spent KD 1.2 million and provided 21,000 hours of training and development to its people. This is a significant increase over last year’s average. Despite fierce competition for talent across all sectors of the labor market, we were able to recruit the top national talents and hired around 260 Kuwaiti employees last year.
Dominant Market Share
Al-Fulaij indicated that NBK continued to drive its labor nationalization efforts, which was highly recognized as it received “The Job Replacement and Nationalization Award”, a prestigious regional recognition by the Committee of the GCC Ministers of Social Affairs.
“Looking ahead to 2023, we aim to sustain our dominant position in corporate finance, reinforce our digital capabilities, and transfer our digital knowledge to our international branches. Strengthening our partnerships with strategic allies, particularly in the oil and gas industry, remains a priority as we strive to maintain our reputation as the preferred bank for financing public projects, and as the “house” bank for lending to KPC and its subsidiaries as we continue to maximize the benefits of infrastructure financing in Kuwait. Meanwhile, our focus on retail banking includes defending our market share through exceptional customer experiences and cutting-edge products and services,” Al-Fulaij concluded.
Distributing Over 50% of Net Profits
In line with NBK’s new dividend and capital returns policy adopted this year, the Bank marked a new milestone by approving the distribution of 10% semi-annual cash dividend (10 fils per share) for the period ended June 2022. Moreover, the Board of Directors recommended the distribution of 25 fils per share for the second half of 2022, bringing the total cash distribution for the year to 35 fils per share, in addition to 5% bonus shares. That brings the cash payout ratio for 2022 to 52% of profits attributable. This step demonstrates NBK’s solid capital adequacy, confidence in its financial position, and ability to generate profits.
Mr. Al-Sager concluded by extending his sincere gratitude to all NBK stakeholders for their continued support, as well as thanking the Bank’s board members and executive management for their dedication and valuable contributions. He also thanked customers for their continued trust and confidence in NBK and extended his gratitude to NBK’s devoted employees for their dedication and tireless efforts. Finally, he expressed his gratitude toward the Central Bank of Kuwait and the Capital Markets Authority for their ongoing efforts to propel the banking sector. In conclusion, he thanked the valued shareholders for their enduring support for the Group’s vision, further solidifying NBK’s leadership position.