Listing on Premier Market continues Boursa Kuwait’s series of milestones

Boursa Kuwait announced that it will list its shares on the “Premier Market” following the Capital Markets’ Authority’s approval and trading of the company’s shares commenced during September 2020, under the ticker symbol “BOURSA”. The company will be classified under the “Financial Services” sector, bringing the total number of companies on the exchange to 174, while the number of listed companies in the “Premier” Market rises to 20 companies.

Boursa Kuwait’s position as a regional leader among stock exchanges is reinforced with the listing of the bourse on the local stock exchange, continuing a series of firsts for the company. It is the first stock exchange to be at least 90% owned by the private sector in the Middle East and the first government entity in Kuwait to successfully undergo privatization. The listing is considered the fruit of the company’s labors and continuous efforts to institute long-term reforms on both the company level and in the Kuwaiti capital market since its establishment, as well as introducing products and services compatible with the best-in-class international standards, all in line with the company’s vision to develop a liquid and transparent financial market.

Boursa Kuwait saw a net profit of KD 5.63 million for first half of 2020 while the company’s total assets came in at approximately KD 41.7 million. Total operating expenses were KD 3.12 million while total operating revenue came in at KD 6.77 million.

The results reflect the strength of the operational model and the strategy in place as well as the company’s financial solvency, which have allowed it to overcome the challenges of the Covid-19 pandemic and deliver an exceptional performance.

Boursa Kuwait Chairman Mr. Hamad Mishari Al-Humaidhi said, “Boursa Kuwait’s listing today marks a historic milestone for the company as it enters the next phase in its growth and development. We are proud of our journey, which has cemented us as the crown jewel of the Kuwaiti capital market and is indeed the model of a Kuwaiti success story, which in turn will contribute to the elevation of the country regionally and internationally. I would like to take this opportunity to commend Boursa Kuwait’s Board of Directors and Executive Management, with their solid structure consistent with the nature and activities of the company, and their efforts to develop a liquid, reliable and sound capital market that services all relevant asset classes, focusing on the interests of both issuers and investors through excellence in everything it does.”

The listing was also hailed by Boursa Kuwait CEO Mr. Mohammed Saud Al-Osaimi, who highlighted the company’s operational excellence. “The listing of Boursa Kuwait on the “Premier

Mohammad Saud Al-Osaimi, Boursa Kuwait, Chief Executive Officer

Market” marks another milestone in the company’s journey of excellence. Apart from the major enhancements that the company drove as the engine of growth and development, the company also witnessed substantial growth in its own operations and continues to work towards strengthening the infrastructure and operational model. Boursa Kuwait has cemented its position as a leading stock exchange that pioneers innovative approaches to market development.”

Since its inception, Boursa Kuwait has worked effortlessly to create a credible exchange built on efficiency and transparency, creating a liquid capital market, a progressive exchange platform and developing a comprehensive set of reforms and enhancements that has allowed it to compete on an international level.

Subdued profitability outlook for KSA’s top 10 banks says ALVAREZ & MARSAL’S Q2 2020 Saudi Arabia Banking Pulse report

Global professional services firm A l va rez & M a rs a l (A&M) has released its latest Saudi Arabia Banking Pulse for Q2 2020. The report suggests that the profitability outlook for banks remains subdued, because of the twin effects of low oil prices and Covid-19 lockdowns which might impact credit demand and asset quality. Saudi Arabia’s top ten banks reported a marginal increase in deposits compared to the preceding quarter, which improved the banks’ funding position. In Q2, the loan to deposit ratio (LDR) increased slightly to 86.1%.

Saudi banks continued to improve their efficiency, as cost to income (C/I) ratio declined for the second consecutive quarter; a result of a regimented approach to cost optimisation and lower operational expenses during lockdown. Despite incessant decline, the C/I ratio remains slightly above the average achieved in in 2019 (34.6%).

The report indicates that the provisions for loans increased significantly for the banks that reported second quarter earnings. Total provisioning rose by 64.7% quarter-on-quarter (QoQ) to SAR 5.1 billion in Q2 2020, continuing its volatile trend. Coverage ratio declined for the fifth consecutive quarter to reach 146.2% because of a rise in the nonperforming loans by 9.6%. Depending on future macroeconomic factors, reserve building could continue in the approaching quarters.

Alvarez & Marsal’s Saudi Arabia Banking Pulse examines the data of the 10 largest listed banks in the Kingdom of Saudi Arabia (KSA), comparing the second quarter of 2020 (Q2 2020) against the previous quarter (Q1 2020).

Alvarez & Marsal’s report uses independently sourced published market data and 16 different metrics to assess banks’ key performance areas, including size, liquidity, income, operating efficiency, risk, profitability and capital. The country’s 10 largest listed banks analysed in A&M’s KSA Banking Pulse are National Commercial Bank (NCB), Al Rajhi Bank, Riyad Bank, Samba Financial Group, Saudi British Bank, Banque Saudi Fransi, Arab National Bank, Alinma Bank, Saudi Investment Bank and Bank Al Jazira.

Dr. Saeeda Jaffar, A&M Managing Director and Head of Middle East, and Asad Ahmed, A&M Managing Director and Head of Middle East F i n a n c i a l S e r v i c es , c o - a u t h o re d the report.

Speaking on the second quarter findings of Saudi Arabia Banking Pulse, Mr. Ahmed, commented, “Despite the challenging stance on profitability, we believe Saudi banks are still intent on paying dividends for 2020 which could bind their pace of growth. The banks top-line growth is also challenged by

Asad Ahmed, A&M Managing Director and Head of Middle East Financial Services

the compression of their net interest margins, limiting income growth. We envisage that the top banks will maintain similar risk appetites but believe the pressures on their profitability and capitalisation will persist for the coming quarters, and only cost optimisation measures can support the banks’ viability.

“We anticipate that regulators will remain committed to containing financial-sector risks with a series of stimulus measures worth SAR 170 billion to support the economy. The planned merger between NCB and SAMBA has reinstated the consolidation wave in the domestic banking sector to create a stronger financial ecosystem in the Kingdom.”

Celebrating excellence in banking and finance

The MEA Finance Awards 2020 celebrate the absolute best of service and achievement in the banking and financial services sectors, and the smartest technology solutions providers to the industry from across the Middle East and Africa.

With the challenges thrust on us in 2020, more than in any recent year, these awards will carry the full weight of the meaning of words like excellence, service and leadership.

KEY DATES

October 6 – Submission Deadline October 11 - November 5 – Judging Process November 10 – Winners Announcement

WHO CAN PARTICIPATE?

Commercial banks Retail and investment banks  Islamic banks Private banks Technology providers Wealth management firms Consultancy and Advisory firms

HOW TO ENTER

Step 1:Choose your category. It is important to review the individual descriptions and criteria before choosing your category.

Step 2: Upload relevant financial performance documents, case studies, or other relevant information.

Step 3: Confirm submission of your entry.

*All nominations shall be submitted on or before 6 th October deadline. Our aim is to provide a platform to highlight and honor the visionary institutions and individuals who continue to set standards of excellence in the industry and create robust financial systems through innovation and digital transformation.

Judges will give due recognition to outstanding banks, financial institutions, and service providers for their:

Exceptional products and services Digital readiness Responsiveness to the changing times Innovative leadership

JUDGING PROCESS

The awards will feature a rigorous two-step judging process by a panel of industry experts in collaboration with the MEA Finance editorial team.

1.

2. All nomination entries will be meticulously evaluated and analysed based on relevant market knowledge, industry research, and accurate company financial statements. The MEA Finance editorial team will then create a shortlist which will be given to the judging panel. The judging panel will be composed of senior executives from professional services firms working with the banking industry. They will review the shortlist and the submitted materials for each category and place a score from 1 to 5 for each category nominee. All scores will be sent back to the editorial team.

3. The MEA Finance editorial team will independently score shortlisted institutions per category. Score values will be from 1 to 5. All scores will be kept confidential and will not be released publicly, nor will they be discussed with any individual applicants. 4. Scores from both the judging panel and the editorial team shall be collected and combined. The editorial team will hold an official tabulation of the scores to determine the highest scoring institution per category which will be declared winner.

Leaders in Banking and Finance (Editors Choice – individual awards)

Outstanding Leadership Award Lifetime Achievement Award Banker of the Year Best Technology Executive of the Year for Financial Services - Vendor Best Technology Leadership Award

Financial Services

Best Retail Bank Best Islamic Bank Best Commercial Bank Capital Markets Transaction of the Year Best Global Bank in the Middle East Best SME Bank Best Takaful Provider Best Private Bank Best Wealth Management Firm in the Middle East Best Trade Finance Provider Best Cash Management Provider Best CSR Programme - Financial Institutions

Covid-19 Responsiveness Special Awards

Best Retail Response to the Covid-19 Crisis Best Commercial Response to the Covid-19 Crisis

Investment

Best Investment Bank Best International Real Estate Investment Firm Best Private Equity Firm Best Brokerage Solutions Provider Best Investment Management Firm - UAE Best Investment Management Firm - Saudi Arabia Best Investment Management Firm - Bahrain

Service Providers to the Banking Sector

Best Investment Consultancy Firm Best Research & Consultancy Firm Best Digital Transformation Consultancy Firm Best Restructuring Consultancy Firm Best Ratings Agency

Technology

Best Mobile Banking Solution Best Neo Bank Best Online Banking Service Best Cybersecurity Implementation Best User-Experience Best Digital Transformation - UAE Best Digital Transformation - Saudi Arabia Best Digital Transformation - Bahrain Best Payments Solution Best Payment Solutions Provider - Vendor Best Cybersecurity Provider - Vendor Best Communications Infrastructure Provider- Vendor Best Core Banking Service Provider - Vendor Best Digital Banking Innovation Provider - Vendor Best Risk Management Solutions Provider - Vendor Best Reg Tech Vendor Best Islamic Finance Banking Software Provider - Vendor Best Islamic Fintech Solutions Provider - Vendor Best CSR Programme - Financial Technology Provider Special Achievement in Digital Innovation

ANNOUNCEMENT & AWARDING

Winners will be announced on 10th November 2020. All winning institutions and individuals will be promoted on MEA Finance website and e-newsletters, and will subsequently be featured in the December issue of MEA Finance magazine to be distributed in the region.

Trophies and certificates of recognition will be presented individually to winners on video and will be made public via MEA Finance website and social media channels.