What have been your main achievements over the past year, and what will be the drivers for growth in 2018?

TAREQ MUHMOOD It has been a successful year for Ahli United Bank in a challenging environment. In a number of areas business has been stable and in other areas we have seen good growth. We expect to see our business continue to evolve over the coming years. This is both in terms of the client relationships we have and also in how we operate, such as embracing more technology. It has changed the way we do business in several ways, including client interactions, where we see significant growth in the use of our mobile applications. We see much more mobile usage of our services in retail banking compared to online desktop banking. However, both are highly relevant to our business today. On the corporate side, more companies are embracing our host-to-host cash management platform to manage their invoices, receivables, collections, and payments. That is only one side of the equation; the other side is how we operate internally at Ahli United Bank to make sure we maximize the use of technologies.

ELHAM MAHFOUZ 2017 was another year of success for CBK; our net profit increased 10% YoY. The bank witnessed healthy growth in all key areas of its business. Net interest income grew by 10.4% while fee income grew by 7.8%. Our non-performing-loan ratio, at 0.53%, is the lowest amongst Kuwaiti banks. These strong financial indicators are the result of the bank’s pragmatic policy of cleaning its loan portfolio by writing off irregular loans and taking all the necessary steps to protect its interests. The bank’s balance sheet grew by 6.5%. A strong bond and quality loan portfolio helped to improve asset yields. Cost of funds was maintained at a reasonably low level ensuring compliance with all regulatory requirements. Most importantly, the capital adequacy ratio was at 18.6% at the end of 2017, comfortably exceeding the regulatory requirement. It is important to focus on available growth opportunities by financing new projects of national importance via PPPs, through efficient management of risks and associated returns. Operational efficiency through the use of the latest technology to provide effective and efficient service to our customers also continues to be a prime focus for us.

How do you assess the local investment climate in Kuwait?

TM The soundness of Ahli United Bank is partly due to our being an Islamic bank, though it has more to do with the management of the bank in Kuwait. It is about making sure we do not take unknown risks. Prudent and conservative management, knowledge of our clients, and expertise on which sectors are forecasted to grow are the biggest drivers of the safety and strength of the bank. CBK’s regulatory framework and oversight, as well as regular stress testing, add to the soundness of banks in Kuwait, whilst our own capital adequacy ratio of above 17% gives a clear indication of our financial strength. In 2018, we will embrace IFRS 9 accounting standards, which is more dynamic as an accounting tool. Generally clients want a bank to be around for a while. This is especially true if clients are investing in long-term projects or placing money that needs to be safe and accessible. What drives the credit ratings are the same things that drive our management, such as making sure we have a diversified deposit base, strong liquidity, and prudent management provisions.

EM In the last three to four years, Kuwait’s government awarded several projects, in contrast to the trend in other GCC countries. Despite the economic and political challenges in the region, the government awarded projects worth over USD85 billion between 2014-2017, as compared to around USD68.5 billion in the seven years prior to 2014. It is estimated that around USD9-10 billion worth of projects were awarded in 2017. Projects in 2016 and 2017 were primarily related to the transportation sector, such as airport projects and road works, as well as healthcare. There are several billions worth of projects that are in different stages of tendering and expected to be awarded during 2018 and the following years. These PPP projects provide an excellent platform for government departments to work with foreign and local companies in relation to several strategic projects. Furthermore, the funding of the projects is primarily through bank financing from the local and international market, whereas the government cash outflow is spread over 25-plus years. This helps the government to manage and reduce the stress on its budget.