Tuesday, January 8, 2013

Kuwait Finance House expects to see turnaround

By Farah Saad

Kuwait Finance House Bhd (KFH) expects to end its losing streak this year, after three consecutive years of losses beginning 2009.

KFH, the first foreign Islamic bank given licence to set up shop in Malaysia in 2004, targets a growth of 15% to 20% in its retail and consumer business, said chief executive officer (CEO) Datuk Jamelah Jamaluddin.

“Our strategy is to focus on our existing accounts in retail and consumer banking as well as expanding our business to the non-Muslim market,” she told The Malaysian Reserve.

The bank has also stepped up its advertising campaign in order to increase its brand presence in the market.

In addition to the 12 branches in Kuala Lumpur, Selangor, Penang, Kelantan, Johor, Sabah, and Sarawak, another new branch is being set up in Penang and is scheduled to open next year, said Jamelah.

In 2011, the bank added four branches.

So far, the bank has been on track towards achieving a profitable 2012 financial year (FY12) by posting profit after tax of RM16.5 million for the first-quarter (1Q) of the year.

For the whole of 2011, KFH posted a net loss of RM596.2 million, which the bank attributed to impairment allowances.

With the allowances safely out of the way, the bank can now look towards brighter times ahead, said Jamelah.

“The losses were due to the bank’s provisioning exercise in dealing with legacy accounts.

This was a necessary approach for the bank to adopt in order to remain on track to write off the last traces of legacy matters while maintaining prudent quality management,” she said.

The bank remains “fully committed” to its transformation exercise, and will continue to take the neccessary measures to improve asset quality, said Jamelah.

KFH was incorporated in 1977 as the first bank operating in accordance with Shariah principles. Its Malaysian operations acts as a regional hub for the Asia-Pacific region.

[The Malaysian Reserve, 27 Aug 2012]