Kuwait Channels Assets to Wealth Fund to Improve Cash Flow
Kuwait has completed the transfer of its remaining valuable assets to the sovereign wealth fund, in return for cash to address its budget deficit.
< 1 min
The transferred assets reportedly include shares in Kuwait Finance House and Zain, a telecommunications company, as well as the state-owned Kuwait Petroleum Corp., valued nominally at 2.5 billion dinars ($8.3 billion), transferred in January.
This move comes as a result of a political dead end that has prevented the government from borrowing, leading to a liquidity crisis in one of the world’s wealthiest countries. This crisis prompted Fitch Ratings to revise its outlook on Kuwait to negative, while maintaining its AA rating.
Fitch cited concerns over the rapid reduction of liquid assets and the lack of legislative approval for government borrowing as factors contributing to financial uncertainty. This follows the warning sent by S&P Global Ratings about a potential downgrade in the country’s rating within the next six to 12 months if the political standstill persists.
Despite being a high-income country, Kuwait has drained its reserves due to long periods of low oil prices. In a bid to generate funds, the government has exchanged its prime assets for cash with the $600 billion Future Generations Fund, designed to preserve the country’s wealth beyond the oil area. With the completion of these asset transfers, it remains uncertain how Kuwait will manage its eighth straight budget deficit, estimated at 12 billion dinars for the upcoming fiscal year starting in April.
Chris Dixon, a partner who led the charge, says he has a ‘very long-term horizon’
Americans now think they need at least $1.25 million for retirement, a 20% increase from a year ago, according to a survey by Northwestern Mutual
Highlighting a significant recovery and robust growth across all key performance metrics.
3 min
Bank of Sharjah has released its results for the period ending 30 June 2024, showcasing robust performance and strong momentum since the beginning of the year. The Bank reported a net profit of AED 171 million, a significant turnaround from the AED 144 million loss in the same period last year.
This remarkable improvement is attributed to a substantial increase in net interest income, stringent credit underwriting, and reduced operating costs, marking a 233% increase over the previous year when excluding the one-time impairment charge from de-linking its Lebanese subsidiary.
The Bank’s exceptional financial results highlight the effectiveness of its strategic focus on sustainable growth, with notable improvements across all major performance metrics. Funded and unfunded income both saw increases, with net interest income rising by 108% and operating income growing by 34%.
Additionally, the cost-to-income ratio improved significantly to 40.1% due to cost discipline measures. The balance sheet remains strong with a loans-to-deposits ratio of 86.63%, indicating comfortable liquidity. The Bank also maintains strong capitalization, with a regulatory capital adequacy ratio exceeding 15% and Tier 1 and CET1 capital ratios around 14%. These positive results underscore the Bank’s underlying strength, operational efficiency, prudent risk management, and ongoing enhancement of shareholder value.
Commenting on the Bank’s results, Sheikh Mohammed bin Saud Al Qasimi, Chairman of Bank of Sharjah, stated: “We are pleased with our outstanding performance in the first half of 2024, which reflects our commitment to adding value to our customers, supporting our communities, and rewarding our shareholders. Despite the challenging geopolitical situation in the region, the UAE economy has remained resilient and continues to register healthy growth following various economic diversification initiatives that provide consistent impetus for trade, investment, and wealth creation. Bank of Sharjah has entered a new chapter with a new leadership team, focused on building new business streams, expanding our reach across the UAE and the region, and delivering exceptional service to our customers.”
He added: “Our performance in the first half of the year demonstrates the effectiveness of our new strategy, and we look forward to delivering continued growth in the years to come.”
The CEO, Mr. Mohamed Khadiri, commented “2024 has begun exceptionally well for Bank of Sharjah, with the bank achieving a record year-on-year profit. I am delighted with our stellar performance as we continue to strengthen the bank’s fundamentals. Our outstanding results reaffirm that our new business strategy is on track to deliver sustainable revenue growth, driven by business expansion, operational efficiency, prudent risk management, and talent development. This achievement is also a testament to the Bank’s success in providing high-quality financial services that meet the aspirations and growing needs of our customers.”
He further added: “Bank of Sharjah is a strong and respected brand within the local community. We are leveraging our core strengths to build a platform that will operate at its full potential across the UAE and the region. The Bank remains focused on executing our strategy and is well-positioned to maintain strong performance throughout 2024 and beyond.”
Chris Dixon, a partner who led the charge, says he has a ‘very long-term horizon’
Americans now think they need at least $1.25 million for retirement, a 20% increase from a year ago, according to a survey by Northwestern Mutual
