KFH ups profits, targets regional growth

18 January 2002

Kuwait Finance House (KFH), the second largest Islamic financial institution in the Middle East, has reported net profits of about KD 53 million ($172.5 million) for 2001, a 10 per cent increase on the previous year. Gross earnings stood at KD 112 million ($364.6 million), of which KD 58.5 million ($190.4 million) was returned to investment depositors, headline figures show.

The board has recommended that a 45 per cent cash dividend and a 5 per cent bonus issue should be paid to shareholders.

KFH's total assets increased by 17 per cent to stand at KD 2,400 million ($7,813 million) at the end of 2001, and the Islamic bank's shareholders' equity expanded by 10 per cent to KD 211 million ($686.8 million).

Last year saw a significant shift in strategy by KFH, with moves made to establish a presence in other GCC countries. It received a full Islamic commercial banking licence from the Bahrain Monetary Agency (central bank) in December (MEED 28:12:01). KFH also bought a minority position in National Bank of Sharjah, which has launched a programme to convert itself into an Islamic financial institution (MEED 30:3:01).

'With the liberalisation of banking services.the bank's strategy would stretch further into new markets such as the USA, Europe and South Asia,' says KFH in a statement.

KFH's strong reputation as a provider of Islamically structured project finance was boosted by its involvement in a $250 million tranche in the financing package for Abu Dhabi's Shuweihat power and water project, and for its lead arranging role on a $200 million Islamic tranche in the refinancing deal for Equate Petrochemical Company (MEED 14:12:01; 7:12:01).

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