Al-Shal: 2.7% increase in operating revenues for Kuwait Finance House

Kuwait Finance House announced its results for the first half of the current year, indicating that the bank achieved net profits (after tax deduction) of approximately 62.3 million dinars, compared to around 60.4 million dinars during the same period in 2025. This represents an increase of approximately 1.9 million dinars, or 3.2%. This rise in net profit levels is attributed to an absolute increase in operating revenues exceeding the rise in operating expenses, as well as an increase in the net reversal of impairment allowances and other provisions.

In detail, total operating revenues increased by approximately 2.4 million dinars, or 2.7%, reaching around 93.8 million dinars, compared to 91.4 million dinars in the same period last year. This was driven by an increase in net interest income of approximately 1.2 million dinars, or 2.0%, reaching around 61.2 million dinars, compared to 60 million dinars. Fees and commissions also rose by approximately 2.6 million dinars, or 10.6%, to reach around 26.9 million dinars, compared to 24.3 million dinars. Meanwhile, dividend income decreased by approximately 1.4 million dinars, or 57.4%, to reach around 1 million dinar, compared to 2.4 million dinars in the corresponding period of the previous year.

Total operating expenses for the bank increased by 1.8 million dinars, or 5.8%, reaching around 32.9 million dinars, compared to 31.2 million dinars in the same period of 2025. The ratio of total operating expenses to total operating revenues stood at approximately 35.1%, up from 34.1%. The net reversal of impairment allowances and other provisions amounted to approximately 5.1 million dinars, compared to 3 million dinars, representing an increase of 2.1 million dinars, or 72.9%, which positively impacted net profits. Consequently, the net profit margin rose to approximately 66.4%, up from 66.1%.

Total bank assets amounted to approximately 5.241 billion dinars, a decrease of 2.3% (122.1 million dinars) compared to 5.363 billion dinars at the end of 2025. However, this represents an increase of 7.9%, or approximately 382 million dinars, when compared to total assets in the first half of 2025, which stood at around 4.859 billion dinars. The loan and advance portfolio, which constitutes the largest contributor to the bank’s assets, decreased by 4.9 million dinars, or 0.2%, to reach approximately 2.969 billion dinars (56.7% of total assets), compared to 2.974 billion Kuwaiti dinars (55.5% of total assets) at the end of 2025. When compared to the same period in 2025, it increased by approximately 6.3%, or 177.2 million dinars, reaching around 2.792 billion dinars (57.5% of total assets). The item “Due from banks and other financial institutions” decreased by approximately 51.5 million dinars, or 8.6%, to reach around 546.6 million dinars (10.4% of total assets), compared to 598.1 million dinars (11.2% of total assets) at the end of 2025. However, it increased by approximately 21.0%, or 95 million dinars, when compared to the same period in 2025, which stood at around 451.6 million dinars (9.3% of total assets).

The figures indicate that the bank’s liabilities (excluding equity) decreased by 142.4 million dinars, or 3.1%, to reach approximately 4.436 billion dinars, compared with about 4.579 billion dinars at the end of 2025. However, they rose by approximately 312.7 million dinars, or 7.6%, compared with around 4.123 billion dinars at the end of the first half of last year. The ratio of total liabilities to total assets stood at approximately 84.6%, compared with 84.9%.

Financial data analysis on an annual basis shows that most of the bank’s profitability indicators declined compared with the same period in 2025. The return on equity (ROE) for shareholders fell to approximately 15.7%, down from 16.3%. The return on assets (ROA) also decreased, reaching approximately 2.4%, compared with 2.5%. Similarly, the return on capital (ROC) declined to approximately 56.9%, compared with 57.7%. Meanwhile, earnings per share (EPS) rose to approximately 31.6 fils, up from 30.6 fils. The price-to-earnings (P/E) ratio stood at approximately 7.5 times, compared with 8.7 times (an improvement), driven by a 3.3% increase in EPS against a 10.2% decline in the share price, compared with June 30, 2025. The price-to-book (P/B) ratio was approximately 1.3 times, compared with 1.6 times in the corresponding period last year.

The bank announced its intention to distribute cash dividends for the first half of 2026 at a rate of 12% of the share’s par value, equivalent to 12 fils per share. Based on the closing share price of 476 fils at the end of June 2026, the cash yield per share amounts to approximately 2.5%.