The National Bank of Kuwait (NBK), the Gulf state’s largest lender, has reported a staggering 15% increase in net profit attributable to shareholders in the first quarter of 2023. This result is due to an increase in net-interest income and fee income, which pushed the bank’s net profit to 134.2 million Kuwaiti dinars, up from 116.5 million dinars in the same period last year.
Resilient Performance Despite Global Headwinds
Despite the prevailing global economic challenges, including geopolitical tensions, inflation, and the banking crisis in Europe and the United States, NBK’s Chairman, Hamad Al Bahar, expressed satisfaction with the bank’s resilient performance during Q1 2023. This was a continuation of the bank’s exceptional performance in 2022.
Gulf States Reform Boosting Non-Oil Revenue
NBK’s profit growth is occurring against the backdrop of Gulf economies rebounding from the Covid-19 pandemic, driven by higher oil prices and reforms to boost non-oil revenue. According to the IMF’s Managing Director, Kristalina Georgieva, the relentless pursuit of reforms by Gulf states is responsible for their strong economic performance, rather than high oil and gas prices alone. Georgieva stressed that the Gulf countries are opening up more space for private investments and competitive businesses, generating jobs and wealth in the process.
Increased Customer Deposits and Loans
Customer deposits in NBK during Q1 2023 increased by 12% annually, amounting to 20.4 billion dinars, while loans, advances, and Islamic financing to customers grew by about 6% to 21.1 billion dinars. The bank’s financial statement also revealed that its total assets grew by 8% to 36.4 billion dinars.
In summary, despite the current global economic headwinds, the National Bank of Kuwait has recorded an impressive 15% rise in its net profit, buoyed by strong performance in net-interest and fee income. The Gulf economies’ reforms are also boosting non-oil revenue, further bolstering NBK’s growth prospects.
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