EXCPR
ANNUAL REPORT 2019
CONTENTS
English
version
·
Feasibility study
·
Key Performance Indicators –KPIs
·
THE DIVIDENDS FOR COMPANIES IN BOURSA OF
KUWAIT
·
TRADING PRICES FOR ALMASAYEL AREA IN THE
STATE OF KUWAIT- CASE STUDY
FEASIBILITY
STUDY
Feasibility study is
one of the significant business and management tools that will study the idea
of a business in an integrated way, before proceeding with the implementation
stage, thus maintaining the various sources of production - raw materials,
labor, and machinery. Therefore, the feasibility study is important as it is
the key sign to move forward with the implementation phase of the project and
to continue it or not, it is thus considered the limit to continue the
implementation of the project before it is actually launched.
COMPONENTS
The feasibility study
consists of key sectors, namely the study of the idea of the project, market
analysis, administrative aspect, operational aspect, competitive analysis,
marketing analysis, in addition to the financial aspect of the project.
PROJECT IDEA
Successful projects
are based on meeting the customer needs in the target market. Since it is known
that customers are looking for competitive prices, high product quality, more
options, high speed, etc., the idea of the project must be studied and
production lines developed towards meeting those desires. Studying this aspect
of the project is also important, as it bets on customers buying the new
product, which requires more time to solve such problems.
MARKET ANALYSIS
The market analysis
aspect of the feasibility study is based on measuring the number of customers
who have shown willingness to buy the new product, which contributes to
calculating the market size. The larger the market, the more it will contribute
to its entry and competition. The rapid growth of the target market would also
give real strength to actual investment with such promising projects. The
market analysis aspect also helps entrepreneurs and business owners to choose a
specific segment of the total market, this is towards meeting their common
needs on an ongoing basis. This aspect also makes the financial value that
customers will pay for the acquisition of the new product, thereby calculating
operational capacity, and measuring the total expected sales volume. This part
of the feasibility study selects the product pricing strategy by choosing the
size of the value added, the increase in the value of total costs, or the
prices of competitors in the market. This aspect can also include the times
when customers order the product, who is primarily responsible for making the
purchase decision, the mechanism of developing production lines, reassure and
development, etc.
ADMINISTRATIVE ASPECT
This part of the study
charts the general strategies of the company, from strategic and annual
objectives, towards achieving the mission for which the company was founded.
This section also examines the types of commercial and legal licenses necessary
to operate the project before state institutions and other official entities.
This part of the study also deals with the size of the employment to be
employed, the necessary skills required, organizational structure, roles and
tasks, the recruitment mechanism, as well as development and training.
COMPETITIVE ANALYSIS
This aspect is based
on increased expected sales and continued competition in the markets towards
staying there for longer. The study is based on an analysis of the competitive
advantage of the new company in managing its business, as well as SWOT analysis
of Strengths/Weaknesses, future Opportunities and anticipated attacks- Threats
on the project. The competitive analysis aspect also includes the study of
competitors in terms of their advantages and weaknesses, as well as their
market share. This aspect of the feasibility study is the basis for
understanding the next aspect - the operational aspect.
OPERATIONAL ASPECT
The operational part
of the study is based on employing and managing all types of different
production sources towards creating a product that will meet the requirements
of customers in the target market. This aspect will therefore include
identifying the materials and tools to be used in operational processes, labor,
location, and the capacity of the production process. This aspect of the
economic seriousness study also searches for suppliers who will be relied upon
to import materials important to the project.
MARKETING ANALYSIS
It is one of the
aspects that distinguishes companies from others in competition and staying in
the market for longer. The importance of this aspect lies in maintaining the
expenses invested to take out the commercial product to customers, and to
maintain the market value of the company. This aspect includes the selection of
the best strategies for promotional operations such as advertising, product
aggregation strategy, customer value-added, and others. Marketing analysis also
examines the best ways to communicate with customers such as direct selling,
retail, or wholesale. This aspect is concerned with identifying the mechanism
for dealing with customers and after-sales service, which will keep this
business under construction.
FINANCIAL ANALYSIS
The last section in
the feasibility study is dealing with the figure and data in details.
Therefore, after complete all previous sections in the feasibility study, and
then it is necessary to convert those results and aggregated data into
financial indicators that are easy to understand and deal with, in addition to
the calculating fixed and variable costs. The importance of this aspect of the
study is that it includes the capital of the project required, and the
mechanism of disbursement of those financial resources, which financial
institutions and banks in particular are looking for. The presence of more
financial indicators in this aspect, such as zero checks to cover break-even point expenses, capital recovery period, and others, will achieve a thorough
understanding of the success of this business process among different
stakeholders.
KEY
PERFORMANCE INDICATORS- KPIs
Key Performance Indicators -KPIs can be
defined as a system for collecting information and choosing the best, to
summarize the actual performance of an organization. By providing the long
time, it takes executives to understand the complex operational performance of
the company's employees on a morning of work. The importance of this system
also lies in the fact that it reflects the real performance of the business and
the growth of the organization towards its pre-defined strategic objectives. In
addition, these performance indicators are now an integral part of the modern
corporate process, which has become a true picture of the company's activity -
if it is better painted. Thus, the performance indicators are a true measure of
strong engagement and communication with the stakeholders on which the
organization relies in its work, thus measuring actual performance with minimal
data and aggregated facts.
The importance of a good KPIs system
will contribute to raising the company's shares in the various capital markets,
considering achieving the principle of transparency and clarity in providing
the most prominent data to investors and the relationship with them. In
addition, the existence of these selected quality indicators will seek to
effectively meet the elements and principles of corporate governance, which
have long appealed to Investor Management.
As for the need for such modern standard
systems, it is well known that today's companies suffer from the existence of
many and many databases, especially after the rapid development of the
technology and information sector in the current century, and their flow in the
form of many periodic reports. This necessitated the need to acquire the most
suitable ones in translating these steps and the work that the institution is
doing in achieving its general vision. In the past, traditional companies
relied on sales volume as a key indicator in understanding the actual
performance of the organization. The higher those sales are, the more the
company is moving in the right direction. However, significant competition and
rapid development in different markets over the past period showed that,
despite the importance of the sales component achieved by the organization,
there are many other key signs that will contribute to the sustainability of
the organization's operational process and growth quick and desired.
The important question is which of the
many information circulating in the organization can be considered a good KPI's
performance indicator? To answer this question, it is necessary to first
understand the information needed by the board members and the staff of the
organization, to guide the work and follow up on its performance well. After
understanding those needs of this important and stakeholder segment, we should
work in the middle and micro departments of the business unit to feed the
business flows with the information necessary for appropriate guidance and
decision-making processes. It should also be stressed that an institutional
system should be established to measure such data and to channel it with
complete credibility in each period of those concerned.
Carefully selected indicators should be
one of the necessary milestones to achieve the strategic vision that the
company aspires to achieve one day. By identifying these important indicators,
it is possible to deduce how long the company's current operational process
will take to achieve the desired objectives. Measuring this period will also
enable the Board of Directors and senior management to direct all production
sources further towards the speed of achieving those strategic objectives -
especially critical ones. The following is an aspect of KPIs performance
indicators circulating in some business sectors:
|
RESPONSIBLE
|
FOLLOW UP
|
MEASUREMENT
|
KPIs
|
SECTOR
|
|
Public Relation Manager
|
Quarterly
|
Customer satisfaction index- CSI -Report
|
Customer attractive
|
Banks and financial
|
|
Managing Director
|
Yearly
|
Yearly Report
|
Assets type
|
|
Financial Manager
|
Monthly
|
Presentation
|
Loans
|
|
Marketing Manager
|
Quarterly
|
Market Report
|
Market share
|
|
Marketing Manager
|
Monthly
|
Presentation
|
Sales per area
|
Retailers
|
|
Marketing Manager
|
Monthly
|
Market Report
|
Sales per Avg. market
|
|
Public Relation Manager
|
Monthly
|
Customer satisfaction index- CSI -Report
|
Customer Satisfaction Index
|
|
Marketing Manager
|
Quarterly
|
Market Report
|
Sales
|
|
Operation Manager
|
Weekly
|
Operation Report
|
Production rate
|
Industries
|
|
Financial Manager
|
Semi annually
|
Financial Report
|
Cost
|
|
Quality Manager
|
Weekly
|
Meetings
|
Work efficiency
|
|
Financial Manager
|
Quarterly
|
Financial Report
|
Production cost
|
It should also be stressed the
importance of providing adequate explanation of each of the KPIs success
indicators, and the reason for being selected as one of those important
indicators in measuring performance. We also emphasize the importance of
comparing current performance with another similar standard situation, such as
the company's situation in previous periods or compared to other competitors in
the market, which will develop the operational process and continuous follow-up
effectively.
Performance indicators may vary in
substance among themselves, as indicators that are suitable for work and
follow-up in one company may not achieve the value added expected of them in
other competing companies. Therefore, performance indicators should be selected
in particular segment and that fit the needs of the organization precisely, in
order to achieve the maximum amount of additions necessary for the
institutional process.
Finally, despite the importance of
informatics and its circulation in the corporate community, the strength of
performance and responsibility must be selected by the most important KPIs
performance indicators, relied upon to continuously understand the
institutional process, and to make critical management decisions in guiding the
course of action. The lack of understanding of the details of the data and
information accumulated can also lose the factor of sound planning and good
management, thereby losing more market shares, losing business opportunities,
and thus exiting markets without return.
THE
DIVIDENDS FOR COMPANIES IN BOURSA OF KUWAIT
The stock market is one of the most critical economic indicators that reflects
the actual operational performance of private sector, as well as the ability of
the executive management to achieve the highest financial returns for
investors. Investment in the stock market is also a major concern for members
of the Kuwaiti society. Despite the decline in the percentage of trades on
Boursa Kuwait during the last decade from USD 330 million to USD 83 million per
day, however, it still keeps the direction and attention of investors and the
small one in generating wealth. EXCPR Co. results shows that there are almost
170 companies in different sectors of work, the number of companies that have
been in the recent withdrawals is competing with each other in attracting more
capital and investors in general, to serve as a platform for evaluating
operational performance. As for the link between the importance of Boursa
Kuwait and strategic vision of the country "Kuwait 2035",
Boursa Kuwait is considered the focus of the foreign investor, who seeks the
vision of the strategic state to attract him towards importing more money into
local listed companies. To shed light on the operational performance of
companies listed on Boursa Kuwait, EXCPR Co. consultancy and business
management has been working on this national initiative, which is an important
indicator for investors and business people, towards obtaining a substantial
financial return and capital deliberation.
CASH DIVIDEND
Investors and business
people often seek to capture the most important investment opportunities and
reduce risk, by carefully studying the different financial markets and
companies, and by looking for the best performers. EXCPR Co. has been following
the various dividend of companies listed on Boursa Kuwait since 2010 to
determine the most accurate results. The company's research indicates that the
best company has distributed cash dividends over the past 10 years in the
Kuwaiti market, is Ooredoo - mobile network Co. - valued at USD 0.3 per share.
Also Kuwait Portland Cement Co. is competing with Ooredoo, with an annual cash
dividend rate of approximately USD 0.3 per share. While the third place, was
that of human soft holding, with a profit distribution rate of about USD
0.24 per share. The following table shows the top 20 prominent companies
listed on Boursa Kuwait in terms of cash distributions during the period
between 2010-2018:
|
AVG. CASH DIVIDEND DURING LAST 10 YEARS – IN USD PER
SHARE
|
COMPANY
|
|
|
0.27
|
National Mobile Telecom. Co. - Ooredoo
|
1
|
|
0.26
|
Kuwait Portland Cement Co.
|
2
|
|
0.24
|
Humansoft Holding Co.
|
3
|
|
0.23
|
United Project Co. -UPAC
|
4
|
|
0.20
|
Mobile Telecom. Co.- Zain
|
5
|
|
0.16
|
Kuwait National Cinema
|
6
|
|
01.6
|
National Petroleum Services Co.
|
7
|
|
0.13
|
Alkout Industrial Projects Co.
|
8
|
|
0.13
|
Combined Group Contracting Co.
|
9
|
|
0.12
|
Boubyan Petrochemical Co.
|
10
|
|
0.11
|
National Bank of Kuwait- NBK
|
11
|
|
0.10
|
Gulf Cable and Electrical Industries Co.
|
12
|
|
0.10
|
Gulf Insurance Co
|
13
|
|
0.10
|
Alahleia Insurance Co.
|
14
|
|
0.09
|
Agility Public Warehousing Co.
|
15
|
|
0.08
|
Independent Petroleum Group
|
16
|
|
0.07
|
Automated System Co.
|
17
|
|
0.07
|
Kuwait Insurance Co.
|
18
|
|
0.07
|
Jazeera Airways Co.
|
19
|
|
0.06
|
Kuwait Projects Holding Co.
|
20
|
The results of the
company also indicate that there are some companies listed in the market, which
regularly distribute annual profits, thanks to its executive management and its
strategy. Although its cash distributions have declined in some years, it has
maintained continuity and consistency in the realization of shareholders '
rights. Below is a list of those companies that have not interrupted the
distribution of cash dividends over the past 10 years:
·
National Bank of Kuwait- NBK
·
Alahli Bank of Kuwait
·
Ahli United Bank
·
Kuwait Finance House- KFH
·
Commercial Facilities Co.
·
Kuwait Projects Holding Co.
·
Tamdeen Investment Co.
·
Kuwait Insurance Co.
·
Gulf Insurance Group
·
Al Ahlia Insurance Co.
·
Salehiya Real Estate Co.
·
Al Tamdeen Real Estate Co.
·
Kuwait Cement Company
·
Kuwait Portland Cement Co.
·
ACICO Industries Co.
·
Alkout Industrial Projects Co.
·
Kuwait National Cinema
·
Agility Public Warehousing Co.
·
Mobile Telecom. Co. –Zain
·
National Mobile Telecom. Co. –Ooredoo
·
National Petroleum Services Co.
·
The Kuwait Co. for process plant construction and
contracting
·
Combined Group-Contracting Co.
·
Palms Agro. Production Co.
·
Alafco aviation lease and finance
STOCKS DIVIDEND
Other types of
investors are usually looking for long-term investment, by focusing on the
selected quality of companies with effective executive management. Therefore,
the distribution of grants provided by companies listed on Boursa Kuwait has
been tracked over the past 10 years. The results of EXCPR Co. research indicate
that the automated systems company is one of the leading companies in the local
market, for the distribution of grants-equities-by 12% per share per annum. KFH
came second in terms of the grant distribution rate of 10% per annually. The Humansoft
holding co. also occupied third place for the largest distribution of profit
grants, estimated at about 8%. The following table shows the most prominent
companies that have distributed grants to their shareholders over the years from
2010 to 2018:
|
AVG. STOCKS DIVIDEND DURING LAST 10 YEARS - %
|
COMPANY
|
|
|
12
|
Automated System Co.
|
1
|
|
9.9
|
Kuwait
Finance House- KFH
|
2
|
|
8.6
|
Humansoft Holding Co.
|
3
|
|
8.2
|
National Petroleum Services Co.
|
4
|
|
7.9
|
Mabanee Co.
|
5
|
|
7.2
|
Shuaiba Industrial Co.
|
6
|
|
7.2
|
Kuwait and Gulf link transport Co.- KGL
|
7
|
|
6.4
|
Kuwait Reinsurance Co.
|
8
|
|
6.1
|
National Bank of Kuwait- NBK
|
9
|
|
6.1
|
Agility Public Warehousing Co.
|
10
|
|
6.1
|
Combined Group Contracting Co.
|
11
|
|
5.3
|
Ahli
United Bank
|
12
|
|
5.2
|
Commercial Bank of Kuwait
|
13
|
|
5.0
|
Kuwait Remal Real Estate Co.
|
14
|
|
4.7
|
Burgan Bank
|
15
|
|
4.5
|
The National Real Estate Co.
|
16
|
|
4.5
|
ACICO
Industries Co.
|
17
|
|
4.1
|
Boubyan Bank
|
18
|
|
3.5
|
Oula fuel marketing Co.
|
19
|
|
3.5
|
Soor fuel marketing Co.
|
20
|
The long-term
investment strategy is based on the management of companies that continue to
distribute grant dividends to their shareholders continuously. Although there
are some fluctuations in different markets, the following companies listed in
the market have adopted a policy of continuous distribution of profits to win the
confidence of shareholders:
·
National Bank of Kuwait- NBK
·
Ahli United Bank
·
Burgan Bank
·
Kuwait Finance House- KFH
·
Boubyan Bank
·
Mabanee Co.
·
ACICO Industries Co.
·
Kuwait and Gulf link transport Co.- KGL
NOT ACTIVE!
As explained in the
previous part of this project, about 20% of the companies listed on Boursa
Kuwait are distributing dividends – cash and shares and – well during last
years. In contrast, the results of EXCPR Co. project indicate that about 29, 4%
of listed on Boursa Kuwait are not active in terms of dividend
distribution over the past 10 years. As the term ineffectiveness means, there
are about 50 companies listed on Boursa Kuwait, which have not distributed any
types of profits – both cash and stocks – to their shareholders since 2010 for different
reasons and policies!!
CASH DIVIDEND PER YEAR
The rate of cash
distributions to companies listed on Boursa Kuwait during the previous 10 years
was USD 3.2 Billion annually, which constitutes about 2.6% of the national
income of the State of Kuwait and its GDP. As shown in the following figure,
the peak period for the cash distributions of listed companies was in 2010,
which was a total value of USD 5.4 Billion. The lowest of these distributions
was in 2012, when they were only USD 3.1 Billion.
In the previous
figure, the gradual growth of cash dividends from listed companies has
continued, since 2014, in the presence of the real estate crisis.
STOCKS DIVIDEND PER
YEAR
The results of the
research carried out by EXCPR Co. indicate that the rate of stocks dividends
for companies listed on Boursa Kuwait over the past 10 years was 1.2% per
annum. As shown in the figure below, the years 2016/2017 are the years with
high cash distributions, while their performance was what companies achieved
last year-2018.
Finally, if investors and
business people want to reduce the chance of risk and seize more investment
opportunities, they should closely follow the behavior of such companies and
equities. Such reports and financial statements, which are based on
transparency and clarity, will support the foreign investor, who is looking for
accurate financial data and technical indicators, to guide capital in the GCC
markets.
TRADING
PRICES FOR ALMASAYEL AREA IN THE STATE OF KUWAIT- CASE STUDY
All agrees that the prices of real
estate trading in the state of Kuwait have become the highest in the world, for
various reasons including the scarcity of supply and increased demand, in
addition to the purchasing power of citizens. The trend towards investment in
residential property has also inflated the value of the transactions for these
lands in different regions of Kuwait. In this regard, EXCPR Consulting and
Business Management Co. , highlighted this axis and dropped it on one of the
regions of Kuwait - Almasayel - as a case study, which is expected to be
applied to the rest of Kuwait in the coming period. The aim of this study is to
link the economic aspect in the lands trading in Kuwait, educate citizens about
these results achieved, in addition to monitoring these indicators, and
presenting them to decision makers and officials in the state, in order to take
care of this issue. This study includes changes in the prices of lands in the
Almasayel region, annual trading volumes in the region, as well as trading
prices against the quantities offered in the market - economic status.
As is well known, the Almasayel area is
located in the center of Kuwait in the Arabian Gulf, which belongs to The Great
Mubarak Province - one of the six provinces in the country, where the building
permit was submitted in 2012, after it was converted into a private residential
sector, and provided with the necessary infrastructure. The study indicates
that the total number of housing units in the area reached 374 housing units
with areas ranging from 375 to 500 square meters per unit, divided into five
different pieces. The results also show that the number of apartments in the
area of Almasayel has become about 180 apartment with an average price of USD
1,810 per month.
CHANGE IN PRICES’
As shown in the
following figure, the rate of increase in the prices of residential areas
increase during past 7 years has been 50.6%, a growth rate of 7.2%
year-on-year. The price per square meter in the region in 2019 reached USD
2,100, up from USD 1,730 at the beginning of 2012. As an example, the 400-meter
land in 2012 was priced at USD 700,000, which is now trading at prices starting
from USD 970,000, an increase of USD 270,000. The Almasayel region, like other
regions of Kuwait, was also affected by the economic recession that hit the
real estate sector in 2014, with the price per square meter falling from USD
3,300 to USD 2,200- by 35% in 2014. As shown in the same figure, the index of the
bullish trading in the Almasayel region was on an upward trend and grew by 1.3%
per annum.
CURRENT UNITS
The volume of trading
on residential lands in the Almasayel area has changed significantly during the
previous period. Trading at the beginning of 2011 was settled only 27 times
during the year due to the lack of all services and infrastructure in the area,
making those seeking private housing regardless of it and looking for other
residential areas. However, demand for the region quickly increased, with
trading up to August 2019 rising to 112 during the year, an increase of 314%.
As the results of the report prepared by EXCPR Consulting indicate, the total
trading on real estate in the Almasayel area over the past 7 years has reached
697 times, with a trading rate of 100 times per year, equivalent to 8 times
during the month. The largest trading on the property was based on Area no 5
and Area no 1, valued 367 times and 359 times- respectively. It is worth
mentioning here that the early years of trading in the Area of Almasayel were
based on specific residential pieces, namely Area 3, 4, and 5, while at the
beginning of 2017 residential lands began to be in significant trading, which
was soon followed by Area 1 - at the beginning of the 2018. As shown in the
following figure, 2018 was the peak for real estate trading in the region,
which reached 218, it compensated for the stagnation in trading in the years
leading up to that period - the period of the real estate recession in
2014. In general, we see the growth in trading over the past seven years
in the Almasayel region.
ECONOMIC RELATIONSHIP
Over the past 7 years,
approximately 224 villas have been built and constructed in the Almasayel area,
accounting for 60% of the total lands in the region, bringing the remaining
volume of lands to approximately 150 lands of different sizes. As is known in
the economic base, the lower the supply in the market, the more likely it is
that prices will increase significantly, if we exclude other external factors.
The results also indicate that the turnover rate per earth in the Almasayel
area was three times, meaning that the number of owners per land was three in
the past 7 years -speculative rate. As shown in the following illustration,
when there is a scarcity of residential land on the market, property prices
rise to an average of USD 2,340 per square meter. While the supply of
residential land in the Almasayel area increases, prices usually drop to USD
2,000 per square meter, a decrease of up to 16.4%.
Finally, supply and demand are the basis
for economic theory, and that the less supply, the higher the price of
residential property, and therefore lower the purchasing power of citizens, and
eventually to reach the stabilization stage. As concluded by this report, more
than 60% of residential lands were exit the total market, the chance of
continued price increases during the next phase would be highly probable, which
may exceed the standard prices in 2014 - the price of a 400-meter residential
land is 1 Million USD. The role of the government sector is also important in
this period, to revive the economic movement, by providing more residential
land for citizens, thereby redesigning the relationship between trading prices
and purchase quantities, and achieving a balance between supply and demand,
especially if we know that the population growth in the country Kuwait is at a
rate of 5% per annum.
The role of the government of the state
of Kuwait is also important in this case, in order to maintain the prices of
the residential real estate sector from overlapping investment, and thus to
maintain prices in light of the purchasing power of citizens. The role of the
financial entities - private banks and Credit Bank of Kuwait - also plays a
role in meeting the needs of citizens in the financial capacity to revive the
real estate sector and meet the basic needs of individuals.
Remark
An earlier report was published on Sep.
2018, we find this relationship ingrained and clear during this period for the
precious gold metal metal metal, which jumped significantly on the world market
in just 3 months from USD 1,312, to reach today trades of USD 1,562 per ounce -
with a growth rate of 19.1%, and that these prices, the standard is in line
with the historical prices of gold metal in April 2011. As this report of EXCPR
Consulting, there is a direct correlation between the growth of gold metal
prices and the trading of the residential real estate sector in Kuwait, which
demonstrates the activity of the residential real estate market in Kuwait since
mid-2018 until now, which is expected to continue in the short period coming at
least. The following figure shows the shape of this relationship between the
two indicators - the shift shape for one month. Therefore, we advise investors
and business people interested in the real estate market to rely on the gold
price index as dashboard to find out the most appropriate times to buy and
invest in the local property, or to sell and exit from it.
KUWAIT’s
BANKs KPIs - PERFORMANCE INDICATORS TOWARDS MAKING THE STRATEGIC DECISIONS
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%. Boubyan 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.
Business
sustainability
P.O.
BOX 21407 – Safat 13075 Kuwait
Tel:
+965 600-39277
Fax:
+965 224-78734
EXCPR Public Relation
Copyright © EXCPR Company
Annual report 2019 – 018.2019
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