Gulf Bank records KD 24 million in net profit for first half of 2025

28/07/2025 05:02 AST

Gulf Bank KSCP announced its financial results for the first half ending June 30, 2025. The Bank reported a net profit of KD 24.0 million, a decline of KD 4.2 million or 14.8 percent compared to 2024 first half net profit of KD 28.2 million.

In addition, Gulf Bank recorded an operating income of KD 91.8 million for the first half of 2025, representing a decline of 5.3 percent compared to the same period of last year. Moreover, operating profit before provisions and impairments was KD 44.9 million, representing a decline of 14.7 percent compared to the first half of 2024. As for the second quarter ending 30 June 2025, Gulf Bank reported a net profit of KD 14.7 million and an operating income of KD 47.8 million, both representing a slight decline of 4.3 percent and 1.7 percent respectively, when compared to the same period of the prior year. However, when compared to the first quarter of 2025, net income has increased from a reported KD 9.4 million in the first quarter to KD 14.7 million for the second quarter, a significant improvement of KD 5.3 million or 57.0 percent. Similarly, operating income increased by KD 3.8 million or 8.7 percent in the second quarter when compared to the first quarter of 2025.

Financial performance
The decline in net profit for the first half of 2025 is attributed to the decline in net interest income of KD 4.9 million or 6.3 percent, coupled with an increase in operating expenses of KD 2.6 million or 5.8 percent, compared to the same period of 2024. However, these declines were partially offset by an improvement in total provisions, which declined by KD 3.4 million or 14.7 percent year-on-year, reaching KD 19.6 million in the first half of 2025.

As for asset quality, the non-performing loans (NPL) ratio was 1.4 percent as of 30 June 2025, compared to the prior year level of 1.2 percent. Additionally, the Bank continues to have significant non-performing loans coverage ratio of 317 percent including total provisions and collaterals. Total credit provisions as of 30 June 2025 reached KD 275 million whereas IFRS 9 accounting requirements (i.e., ECL or expected credit losses) were KD 180 million. As a result, the Bank has a healthy excess provision level of KD 96 million, above and beyond what is required by the IFRS 9 accounting requirements. Compared to 31 December 2024, total assets declined by 2.4 percent to KD 7.3 billion, whereas net loans and advances increased by 3.8 percent to KD 5.7 billion. On the other hand, total deposits stood at KD 5.4 billion and total Shareholders' equity reached KD 825 million. The Bank's regulatory Tier 1 ratio of 14.6 percent was 2.6 percent above the regulatory minimum of 12 percent and the Capital Adequacy Ratio (CAR) of 16.8 percent was 2.8 percent above the regulatory minimum of 14 percent.

Strategic clarity
Commenting on the financial results for the first half of 2025, Gulf Bank Chairman Ahmad Mohammad Al-Bahar stated: "Gulf Bank's performance during the first half of 2025 demonstrates resilience and clarity in the face of a complex operating environment. Rising geopolitical tensions and oil price fluctuations have added volatility to regional markets and shifted fiscal priorities. Despite these headwinds, Gulf Bank has maintained its solid fundamentals and strategic direction, enabling us to remain adaptive and forward-looking. He continued: "One of the most significant initiatives under consideration is the potential conversion of Gulf Bank into a fully Sharia-compliant institution. This transformation aligns with our long-term vision and would allow us to expand our reach, diversify our offerings, and better serve the evolving needs of our clients. Moreover, we have signed a Memorandum of Understanding with Warba Bank stating the basis of cooperation in assessing the proposed merger between both banks independently ensuring the best interest of all the Bank's shareholders in line with regulatory controls."

Al-Bahar concluded: "We look ahead to the second half of the year with confidence in our strategic direction and the strength of our team. On behalf of the Board of Directors, I extend my appreciation to our shareholders, employees, and customers for their continued trust and support. We also thank the Central Bank of Kuwait and regulatory authorities for their guidance. Gulf Bank remains committed to delivering high-quality banking services and supporting Kuwait's financial future."

Operational discipline
Gulf Bank Acting Chief Executive Officer Waleed Khaled Mandani, stated: "Despite persistent pressure on margins across the sector, our second quarter results reflect strong execution and a prudent approach to managing our operations. We continued to maintain a balanced approach between credit expansion and asset quality, ensuring the resilience and integrity of our loan book. Our low non-performing loan ratio and high coverage levels underscore the effectiveness of our risk management framework and our ongoing commitment to financial stability." He added: "We are also advancing our internal readiness for a potential Islamic Sharia-compliant conversion subject to being granted with the necessary regulatory and shareholders' approvals. The essential systems, governance frameworks, and talent are being explored for a smooth transition. At the same time, we continue to deliver practical banking solutions and maintain the agility needed to respond effectively to changing market conditions." Mandani further noted: "Recent government debt issuances, estimated at KD 600 million locally and another potential $6 billion internationally are expected to support government spending on capital development projects across vital sectors including infrastructure, housing, and logistics, thus accelerating economic activity and enabling faster participation by banks in financing national initiatives. Moreover, such instruments could provide banks with added flexibility in managing their balance sheets and capturing emerging financing opportunities. We remain opportunistic in utilizing these tools to support our growth plans."

Credit ratings and recognitions
Gulf Bank's financial strength and operational resilience were affirmed by leading credit rating agencies. Fitch Ratings assigned a Long-Term Issuer Default Rating (IDR) of 'A' with a Stable Outlook, while Moody's rated long-term deposits at 'A3' with a Positive Outlook. Capital Intelligence affirmed a Long-Term Foreign Currency rating of 'A+' with a Stable Outlook, further highlighting the Bank's stability and sound risk management practices. Reinforcing its position as a digital leader in the region, Gulf Bank has been awarded the "Best Mobile Banking Application and Experience" by MEED business intelligence platform during the Middle East and North Africa Banking Excellence Awards ceremony. This prestigious recognition highlights Gulf Bank's ongoing commitment to delivering an advanced, exceptional digital banking experience to meet customer expectations and enhance ease of access to banking services.

Responsible banking
During the second quarter of 2025, Gulf Bank advanced its ESG agenda through impactful environmental and social initiatives aligned with its 2030 Sustainability Strategy. A key milestone during the quarter was the official launch of the Bank's Sustainable Finance Framework and internal Sustainability Risk Management Policy, aimed at integrating ESG considerations into lending decisions, operations, and risk oversight. In parallel, the Bank remained active across various community initiatives, with an emphasis on youth development, financial literacy, and education. These programs reflect Gulf Bank's ongoing commitment to supporting inclusive growth, empowering the next generation, and contributing to Kuwait's broader sustainable development goals.

Key financial indicators for the first Half 2025:
1. First half 2025 net profit of KD 24 million.

2. First half 2025 operating income of KD 91.8 million.

3. Net loans and advances grew by 3.8 percent year-to-date to reach KD 5.7 billion.

4. Non-performing loan ratio as of June 30, 2025 was 1.4 percent, with a solid non-performance loan coverage ratio of 317 percent including total provisions and collaterals.

5. Capital ratios as of 30 June 2025, Tier 1 ratio was 14.6 percent and Capital Adequacy Ratio (CAR) was 16.8 percent.

Ahmad Mohammad Al-Bahar
 Gulf Bank delivered resilient performance with strategic clarity despite a complex operating environment.

 The Bank's potential conversion to Sharia-complaint aligns with our vision of expanding and diversifying our reach and offerings.

 We look ahead to the second half of the year with confidence in our strategic direction and the strength of our team.

Waleed Khaled Mandani
 Our results reflect strong execution and a prudent approach to managing our operations.

 We continued to maintain a balanced approach between credit expansion and asset quality, ensuring the resilience and integrity of our loan book.

 Recent Government debt issuances could provide banks with added flexibility to manage their balance sheets and capture emerging financing opportunities.

Kuwait Times