EXCPR™: KUWAIT’s BANKs KPIs

KUWAIT’s BANKs KPIs

STUDY INCLUDES THE MOST CRITICAL PERFORMANCE INDICATORS TOWARDS MAKING THE STRATEGIC DECISIONS

Introduction
Leading businesses rely on different financial data and indicators to continuously follow up on their corporate performance, as well as to make the best strategic decisions to move the competition forward and increase their market share. In this regard, EXCPR Consulting and Business Management, based in state of Kuwait, launched its quarterly report on the performance of local banks, which includes more benefits that decision makers in these institutions are looking for while presiding over regular meetings. By offering such additions to the local market, EXCPR Consulting always seeks to be a neutral party between evaluating the performance of financial institutions in Kuwait, and between achieving the needs of investors and stakeholder’s requirement on the other hand, by providing data compared to other competing companies in the local market. In addition, access to such data by stakeholders and interested stakeholders would be shortened to more time and to be present to decision makers at the meeting table on an ongoing basis. The following table shows the general comparison:

Market share

Market share is one of the most important indicators on which the board members of the banks in addition to the senior management in those institutions, by not only measuring the performance of the company, but also to compare the company's current activity compared to the performance of competing banks in the market. In this regard, the results of the research of EXCPR Consulting and Business Management indicate that NBK continues to master the local banking sector with a market share of 32%. Kuwait Finance House (KFH) came in second place with a percentage of about 26% of the total market. The following figure shows the market share of other competing companies in the domestic market:

Net profit

As for the net profit model, NBK is also one of the best local banks in terms of net profit, with an estimated value of KD 371 million. KFH ranked second in the domestic market with net profit of KD 227 million. The average industry net profit of local banks in Kuwait is about KD 108 million per year, as described in the following figure:

Assets per Employees

Another management indicator that contributes to the awareness of the activity of institutions and banks in Kuwait, like other leading international companies, is the so-called total asset value relative to the numbers of employees at the Bank. In this regard, the results of EXCPR Consulting indicate that the greatest percentage of this indicator was that each employee working at NBK is equivalent to an asset value of about KD 12.3 million. Burgan Bank ranked second in terms of measuring the bank's assets against employees, with a value of about 10 million KD per employee. KFH came in third place with a remain of KD 7 million per working employee, as shown in the following illustration:

Annual distributions

Annual distributions distributed by banks in Kuwait are among the signs that investors in general and small investors in particular are constantly looking for, in order to achieve more wealth and financial advantages. As for the cash dividends distributed by local banks, NBK has issued the index with annual distributions of 33 fils per share. KFH ranked second with a cash distribution of 16 fils per share. As for the grant profits distributed by local banks over the past years, KFH topped the list with a distribution rate of 9.9%, compared to 6.1% for NBK. The financial banking sector in Kuwait has averaged about 12 fils per share and 4.4% for grant distributions, as described in the following figure:

Change in net profit

The change in net profit from the different brands is also indicative of the activity of banks compared to their performance in the past work, compared to the rest of the market. In this context, Burgan Bank topped this list with an annual growth rate of about 27.7%. KFH was second with 23.4% of the bank's performance last year. Gulf Bank was ranked third, with an estimated annual net profit growth of 18.8%, as shown in the illustration below:

Return on equity - ROE

The ROE index is important for most international companies in comparing the performance of companies and the effectiveness of their executive management in carrying out their tasks. In this respect, this indicator was inferred and projected to the banking sector in Kuwait. The results of the research indicate that the best local banks in the rate of return on shareholders' equity were the share of KFH by 12.1%. Bobyan Bank, the Islamic arm of NBK, came in second with 10.9%, followed by third place with 10.8% (NBK). The following figure shows the ratio of this important indicator on the performance of local banks in the country:

Market value

The market value of local banks and banks is one of the most important indicators that shows the confidence of investors in their types of institutions and groups in addition to individuals, in achieving satisfaction with the performance of the board of directors represented by their executive management. The higher the market value of that enterprise, the greater the amount of mutual trust that has been obtained. In this regard, the results of the research of EXCPR Consulting indicate that about 39% of the total market value of local banks in Kuwait was held by NBK. KFH came in second with 28%. Despite the short duration of the establishment of Boubyan Bank, it was able to keep pace with the leading local banks, which managed to achieve 9% of the total market value of the banking sector in Kuwait. The following figure shows the market value ratio of the rest of the local banks:

Finally, performance measurement indicators and the choice of the best are the basis for continued competition in the markets and the inflated margin of profitability expected. Tracking such data and equations also has a significant role to play in raising the organization's operational efficiency rate, thereby achieving the highest level of value added expected to stakeholders.