Al-Shal Report: Most profitability indicators of Kuwait Finance House recorded positive performance

Kuwait Finance House announced its results for the first half of the current year, indicating that the bank’s net profit (after tax deduction) reached approximately 434.1 million dinars, an increase of about 48.3 million, or 12.5 percent, compared to approximately 385.8 million for the same period in 2025.

Net profit attributable to shareholders amounted to approximately 363.1 million, compared to approximately 342.1 million for the same period last year, representing an increase of about 20.9 million, or 6.1 percent.

This rise in total net profit is attributed to higher operating revenues and lower operating expenses, as well as a reduction in the cash losses recorded by the bank resulting from the application of an international accounting standard to its subsidiary in Turkey, due to rising inflation rates. This was offset by an increase in total provisions and tax values.

Specifically, Al-Shal stated that total operating revenues increased by approximately 89.4 million dinars, or about 9.9 percent, reaching approximately 990.5 million, compared to 901.1 million for the same period last year.

This was achieved due to an increase in the net financing revenues line item by approximately 42.1 million, or about 6.9 percent, reaching approximately 649.4 million, compared to approximately 607.3 million. The net foreign exchange profits line item also rose by approximately 43.6 million, a 126.6 percent increase, reaching approximately 78.1 million, compared to approximately 34.5 million.

The ratio of total operating expenses to total operating revenues stood at approximately 30.6 percent, down from approximately 34.3 percent during the same period in 2025.

Total provisions increased by approximately 44.1 million, a 113.0 percent rise, reaching approximately 83.2 million, compared to approximately 39 million. The bank recorded cash losses of approximately 62.7 million, compared to approximately 71.2 million for the same period last year, a difference of 8.5 million between the two periods.

These figures explain the increase in the net profit margin to approximately 43.8 percent, compared to approximately 42.8 percent for the same period last year.

Total bank assets decreased by 544.7 million, or -1.3 percent, to reach approximately 42.215 billion, compared to approximately 42.760 billion at the end of 2025. However, they increased by approximately 3.717 billion, or 9.7 percent, compared to approximately 38.498 billion for the same period last year.

The “Financing Debtors” line item increased by approximately 966.7 million, or 4.4 percent, reaching approximately 22.784 billion (54.0 percent of total assets), compared to approximately 21.817 billion (51.0 percent of total assets) at the end of 2025. It also rose by approximately 2.354 billion, or 11.5 percent, compared to the same period last year, when it stood at approximately 20.430 billion (53.1 percent of total assets). Meanwhile, the “Amounts Due from Banks” line item decreased by approximately 1.251 billion, or -36.3 percent, to reach approximately 2.196 billion (5.2 percent of total assets), compared to approximately 3.447 billion (8.1 percent of total assets) at the end of 2025. It increased by approximately 180.4 million, or 8.9 percent, compared to the same period last year, when it stood at approximately 2.016 billion (5.2 percent of total assets).

The figures indicate that the bank’s liabilities (excluding equity) recorded a decrease of 478.1 million, or -1.3 percent, reaching approximately 35.437 billion, compared to approximately 35.915 billion at the end of 2025.

Had we compared total liabilities with the same period last year, we would have found an increase of approximately 3.298 billion, or about 10.3 percent, as they stood at around 32.139 billion at that time. The ratio of total liabilities to total assets reached approximately 83.9 percent, up from 83.5 percent.

Al-Shal stated: “The results of the financial data analysis, calculated on an annual basis, indicate that most of the bank’s profitability indicators recorded positive performance compared to the same period in 2025. The Return on Capital (ROC) indicator rose to approximately 45.4 percent, up from 43.4 percent. Similarly, the Return on Equity (ROE) for shareholders increased to approximately 12.6 percent, compared to 12.3 percent. Meanwhile, the Return on Assets (ROA) indicator declined slightly to approximately 2.0 percent, down from 2.1 percent. Earnings Per Share (EPS) for shareholders rose to approximately 18.86 fils, compared to 17.98 fils. The Price-to-Earnings (P/E) ratio stood at approximately 20.3 times, down from 22.3 times (indicating an improvement), due to the rise in EPS by approximately 4.9 percent against a decline in the share price by approximately 4.4 percent, compared to their levels at the end of June 2025.

The Price-to-Book (P/B) ratio reached approximately 2.6 times, compared to 2.7 times. The bank announced its intention to distribute cash dividends for the first half of 2026, at a rate of 10 percent of the share’s nominal value, equivalent to 10 fils per share. Based on the closing share price of 767 fils at the end of June 2026, the cash yield per share amounts to approximately 1.3 percent.”