National Bank of Kuwait, the biggest lender in the Gulf country by assets, reported an 8.5 per cent increase in its first-quarter profit due to lower impairment losses.
Net profit for the three-month period ending March 31 climbed to 84.3 million Kuwaiti dinars ($278.8m), the bank said in a statement to Boursa Kuwait, where its shares trade.
Provision charge for credit losses and impairment losses declined 17 per cent annually to 42.6m dinars, while net income from Islamic financing rose 20 per cent to 40.2m dinars. Non-interest income also rose during the period.
Customer deposits dropped 1 per cent to 17 billion dinars and total liabilities rose 0.4 per cent to 26.73bn dinars, the bank said.
“During the first quarter of the year we continued to experience some of the challenges resulting from the Covid-19 pandemic including movement restrictions and renewed closures,” NBK group chairman Nasser Al Sayer said.
“Despite these headwinds, NBK was able to grow its profits for the period demonstrating its resilient business model, solid financial fundamentals backed by its prudent income diversification and digital transformation strategies.”
Total assets at the end of March grew 1.5 per cent annually to reach 31bn dinars while total loans and advances increased 0.8 per cent annually to 17.9bn dinars, according to the lender.
Lenders across the region are reporting an improved performance due to lower impairment losses as the economic outlook improves on the back of an accelerated vaccine roll out.
Emirates NBD, Dubai's biggest lender by assets, said on Tuesday its first-quarter profit rebounded 12 per cent owing to lower impairment losses and operating expenses amid a broader economic recovery in its home market.
Earlier this month, Kuwait extended its month-long movement restrictions by two weeks to April 22. As of Tuesday, the country reported 258,497 cases while more than 240,000 people recovered from the infection, according to Worldometer, which tracks the pandemic.
Kuwait is also moving ahead with its vaccination programme to stem the spread of the pandemic.
NBK said it will continue to monitor costs in the current situation and is hopeful it will benefit from a "gradual recovery".
“In light of market conditions, we will continue to closely monitor costs, optimise operations and our balance sheet, and invest in areas where we believe the greatest short- and long-term impact can be achieved,” NBK's group chief executive Isam Al Sager, said.
“We will maintain our conservative approach to risk, allowing us to withstand external pressures until during the gradual normalisation of economic activity, which we are cautiously optimistic will take place in the course of 2021.”