Van der Tol: Al-Ahli showed a strong performance that reflects their ability to execute their plans

The Kuwait Finance House (KFH) Group held an analysts’ conference regarding its first-half 2026 results, attended by Group Chief Executive Officer Gilles Jean van der Tol, Chief Financial Officer Shyamak Sonawalla, Head of Strategic Planning and Follow-up Dr. Abdulaziz Jassim, and Assistant General Manager of Strategic Planning and Follow-up Osama Ezzeldin, to outline the financial indicators recorded during the first half of 2026 and the Group’s future strategic plans.

Speaking on the occasion, van der Tol said: “KFH delivered a strong performance in the first half, strengthening the foundations necessary for long-term growth despite ongoing regional uncertainty. This reflects our resilience, the quality of our earnings, and our ability to execute our plans consistently in line with our strategic objectives.”

He added: “Our results reflect strong momentum across all sectors. We achieved solid profit growth, strengthened our balance sheet and asset quality, and maintained a strong capital position. We also enhanced our funding position and maintained a disciplined approach to risk management. Collectively, these achievements reinforce the robustness of our business model and provide a strong platform for future growth.”

He noted that net profit attributable to shareholders rose by 16.9% year-on-year to KD 37.1 million, while earnings per share increased by 9% to 12 fils. He attributed this performance to strong revenue growth, disciplined cost management, and balance sheet strengthening through increased credit loans and deposits, alongside a fortified capital position. The Common Equity Tier 1 (CET1) ratio stood at 12.60%, while the non-performing loans (NPL) ratio was 1.25%. He emphasized that these results collectively demonstrate the strength of the Group’s core banking business and the quality of its earnings.

Van der Tol stated that total assets increased by 5% compared to December 2025, reaching KD 7.3 billion, supported by a 7.8% growth in loans. Customer deposits rose by 6.5%, reflecting confidence in the strength of KFH.

**Balance Sheet Strength**

He added: “We continued to strengthen our balance sheet alongside business growth. The NPL ratio improved to 1.25% from 1.35% in June 2025, reflecting high-quality underwriting and prudent portfolio management. Simultaneously, we maintained a strong capital position, with the CET1 ratio at 12.60% and the total capital adequacy ratio at 18.03%, providing the financial capacity and flexibility needed to support future growth ambitions.”

Van der Tol revealed that the Central Bank of Kuwait (CBK) approved an increase in the Group’s certificate of deposit program from USD 500 million to USD 1.5 billion. He confirmed that this approval represents a key strategic milestone, significantly enhancing the Group’s funding flexibility, diversifying funding sources, and supporting the next phase of its growth strategy.

This comes as Moody’s reaffirmed KFH’s rating at A2 with a stable outlook, while Fitch maintained its rating at A with a stable outlook, underscoring the strength of the balance sheet and the consistency of financial performance.

He highlighted that the Bank’s institutional strength is a key differentiator, supported by an experienced leadership team and a talented workforce. Human capital remains a core competitive advantage, as the Bank continues to enhance its work environment. Kuwaitis hold approximately 70% of leadership positions, while women constitute 41% of the total workforce, reflecting the Bank’s commitment to developing national talent and comprehensively improving the work environment.

**Developing Priorities**

He disclosed the update of the Group’s strategy by refining its strategic priorities to seize new opportunities in its business sectors according to its operational model, aiming to enhance its competitive position and create sustainable, long-term value for shareholders. He noted that the banking sector in Kuwait continued to benefit from prudent regulation, strong liquidity, and adequate capital adequacy levels, despite an unclear regional operational environment due to geopolitical uncertainty and market volatility.

Van der Tol expressed optimism regarding the second half of 2026. He stated that while geopolitical developments still require caution, the Group’s strong capital position, diversified funding profile, high asset quality, and disciplined plan execution provide a solid foundation for continued growth.

**Brand Strength**

For his part, Shyamak Sonawalla said: “Our first-half results this year demonstrate the continued strength of our financial performance, supported by strong revenue growth, disciplined balance sheet management, and continuous improvement in asset quality. This generally reflects the strength and resilience of the KFH brand. We achieved strong growth in our key financial indicators, further enhanced the quality of our loan portfolio, maintained capital and liquidity strength, and further improved our financial resilience to navigate turbulent conditions.”

He pointed out that net profit attributable to shareholders rose by 17% year-on-year to KD 37.1 million, while earnings per share increased by 9% to 12 fils. Return on average equity improved by 81 basis points to 10%, reflecting higher profitability, disciplined capital distribution, and the Group’s earnings flexibility.

He continued: “Operating income rose by 9.5% year-on-year to KD 119.2 million, primarily driven by a 14.6% increase in net interest income. This reflects lower funding costs and an improved funding mix, leading to a net interest margin expansion of 34 basis points to 2.54%. These indicators contributed to an 8% increase in operating profit to KD 67.9 million, confirming the strength of our operational performance.”

He noted that the cost-to-income ratio remained well-controlled at 43.1%. Although it increased by 90 basis points year-on-year, it continued its downward trajectory from 43.8% at the end of 2025.

Sonawalla explained: “Our diversified business model continues to support the quality and strength of our earnings. Corporate Banking remained the largest contributor to operating income at 44%, followed by Retail Banking at 33%, and Treasury and Investment at 23%, providing a balanced and diversified earnings mix.”

He added: “Our capital adequacy ratios remained strong, with the total capital adequacy ratio at 18.03% and CET1 at 12.60%, comfortably above regulatory minimums. This contributes to our ability to support future growth. The NPL ratio improved to 1.25% from 1.35% in June 2025, reflecting disciplined underwriting, prudent portfolio management, and proactive credit monitoring.”

Sonawalla continued: “The provision coverage ratio remained strong at 340%, with loan provisions maintained in accordance with CBK directives, exceeding IFRS 9 requirements by KD 196 million. This provides a strong buffer against any adverse credit developments.”

He disclosed that total assets increased by 5% to KD 7.3 billion, with net loans and advances growing by 7.8% to KD 4.9 billion, and customer deposits increasing by 6.5% to KD 4.3 billion since December 2025. This aligns with the Group’s disciplined and risk-adjusted approach to growth, supported by strong funding franchise and sustained customer confidence. He noted that liquidity metrics remained strong, with a liquidity coverage ratio of 247% and a net stable funding ratio of 120%, both comfortably above regulatory requirements.

**Disciplined Execution**

For his part, Dr. Abdulaziz Jassim stated that the Bank continued to focus on the disciplined execution of strategic plans across its main business sectors. Through Corporate Banking, it continued to enhance its portfolio by increasing the base of low-cost deposits and focusing more on higher-yield customer relationships, which helped improve returns on capital.

He said: “We continued to strengthen our Retail Banking service network in Kuwait, focusing on segments including Kuwaiti employees and expatriates. This reflects our disciplined approach to attracting premium customers while maintaining prudent lending standards. Additionally, we are developing our AI capabilities, enhancing customer engagement, improving operational efficiency, and upgrading our digital capabilities across the Group.”

**UAE and ABK Wealth Management**

Jassim added: “The Retail Banking team in the United Arab Emirates made progress on the ‘Jaywan’ initiative, approved by the Central Bank of the UAE. This initiative aims to establish a local payment gateway alongside global Visa and Mastercard cards. We have completed our internal operational readiness to issue Jaywan debit cards and support local payment transactions via the Jaywan payment network.”

He further stated: “Through ABK Wealth Management, we further strengthened our investment platform through our strategic partnership with Barings, a global leader in alternative asset management with approximately USD 481 billion in assets. We also launched a US Dollar money market fund.”

Jassim considered that these initiatives supported strong business momentum, with the customer base growing by nearly 50% and managed assets increasing by approximately 30% year-on-year.

**Key Milestone**

He clarified that a key milestone regarding Environmental, Social, and Governance (ESG) sustainability during the first half of 2026 included the publication of the 2025 Sustainability Report, which aligns with leading reporting standards and includes specific sustainability classification metrics. This reinforces the Bank’s commitment to transparency, accountability, and creating long-term value, supported by a comprehensive data collection framework.

He continued: “We advanced key sustainability priorities, including sustainable finance initiatives, climate-related efforts, and the integration of sustainability principles into our operations, in line with regulatory developments. This ensures our continued approach to supporting long-term sustainable growth and meeting stakeholder expectations.”

**Strategy Update**

Jassim disclosed: “Our strategy for the next five years focuses on launching the next phase of KFH Group’s growth by accelerating profitable organic growth, while selectively pursuing external opportunities that generate added value. Our focus is increasingly on delivering sustainable value to shareholders and achieving higher returns on equity through balanced growth in Kuwait, the UAE, and Egypt, supported by disciplined capital distribution and investments in our strategic capabilities.”

He added: “This includes enhancing our offerings for individuals, corporate clients, and wealth management; developing banking transactions in parallel with our preparation for the anticipated Kuwaiti mortgage law. We will also continue to develop our digital banking solutions, upgrade our technological infrastructure and data platforms to enhance their potential, and leverage AI and advanced analytics to improve productivity and operational excellence.”