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National Bank of Kuwait’s first-quarter profit surges 38 percent

Published: Updated:

National Bank of Kuwait, the country’s biggest lender, reported on Tuesday a first quarter profit of $381.79 million (116.6 million dinars), a 38 percent annual rise on lower impairment losses and higher net operating income.

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EFG Hermes had estimated $307.5 million (94 million dinars) in profit for the quarter.

Total operating revenue in the quarter reached $773.73 million (236.5 million dinars) from $724.65 (221.5 million dinars) a year earlier.

S&P Global Ratings said on Monday it expected the operating environment for banks in Kuwait will improve this year on the back of high oil prices and a continued recovery from the impact of the pandemic.

“However, some constraints persist. The Kuwaiti government’s fiscal funding strategy remains uncertain, considering that the debt law has yet to be adopted,” S&P said, referring to a proposed law that successive parliaments and cabinets have wrangled over for years that would allow Kuwait to raise international debt.

“What’s more, the government’s key liquidity buffer, the General Reserve Fund (GRF), has diminished substantially.”

Still, S&P expected non-performing loans and cost of risk to “gradually normalize” and that higher interest rates would boost banks’ profits, while high exposure to real estate “continues to be a key risk.”

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