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National Bank of Kuwait (NBK), the country’s largest lender, reported a 9.86 percent rise in net profit for Q2 2019, as provisions expenses dropped. The results were in line with analysts’ estimates.
The bank recorded a net profit attributable to shareholders of 101.4 million Kuwaiti dinars ($333.05 million), compared to 92.3 million dinars in Q2 2018, in line with CI Capital’s estimate.
“Net income grew by 10 percent year-on-year (y-o-y), driven by 31 percent y-o-y drop in provisions expenses, which we highlight as one of the main positives of the results,” Sara Boutros, senior analyst - real estate and financials at CI Capital told Zawya.
“NIM (net interest margin) inched up by 1bps (basis point) quarter-on-quarter (q-o-q) to reach 2.81 percent (-10bps y-o-y), in our numbers, stabilising again on a q-o-q basis, and indicating a relief to the margin pressure on the absorption of higher funding costs,” Boutros said.
NBK’s total operating revenue amounted to 226.3 million dinars in Q2 2019, compared to 228.7 million dinars in Q2 2018, a 1.05 percent drop, roughly in line with CI Capital’s estimate of 223 million dinars.
The bank’s loans were up 6.5 percent y-o-y, while deposits grew 5.7 percent y-o-y. CI Capital expects an 8.6 percent growth in net loans for 2019 and a 7.5 percent increase in deposit growth.
The bank’s shares were trading 0.6 percent higher on Wednesday at 1012 dinars by 12:30 GST and have added 27.41 percent so far since the start of 2019.
“We see an upside potential of 15 percent to the current market price, after the recent stock rally,” Boutros said.
Reporting by Gerard Aoun; Editing by Seban Scaria)
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