Al Ahli Bank of Kuwait K S C P : Financial Statement

AL AHLI BANK OF KUWAIT K.S.C.P. AND ITS SUBSIDIARIES

INTERIM CONDENSED CONSOLIDATED FINANCIAL INFORMATION (UNAUDITED)

30 SEPTEMBER 2023

Al Ahli Bank of Kuwait K.S.C.P. and its subsidiaries

INTERIM CONDENSED CONSOLIDATED INCOME STATEMENT (UNAUDITED)

For the period ended 30 September 2023

		Three months ended		Nine months ended
		30 September		30 September
		2023	2022		2023	2022
	Notes	KD 000	KD 000		KD 000	KD 000
Interest income		106,892	73,480	301,969	189,091
Interest expense		(70,906)	(38,661)	(200,673)	(94,296)
NET INTEREST INCOME		─────────	─────────		─────────	─────────
	35,986	34,819	101,296	94,795
Net fees and commission income		9,721	8,384	26,409	24,836
Net foreign exchange gain		3,571	2,882	5,456	6,687
Net (loss) gain on investment securities		(1,981)	75	(1,781)	1,899
Dividend income		58	396	1,245	1,593
Share of results from an associate		635	1,003	2,349	2,614
Other operating income		518	623	1,827	2,052
OPERATING INCOME		─────────	─────────		─────────	─────────
	48,508	48,182	136,801	134,476
		─────────	─────────		─────────	─────────
Staff expenses		(11,721)	(11,116)	(35,658)	(33,748)
Other operating expenses		(8,412)	(8,173)	(25,576)	(22,755)
Depreciation and amortisation		(1,459)	(1,720)	(4,392)	(5,480)
OPERATING EXPENSES		─────────	─────────		─────────	─────────
	(21,592)	(21,009)	(65,626)	(61,983)
OPERATING PROFIT BEFORE PROVISIONS AND		─────────	─────────		─────────	─────────
	26,916	27,173	71,175	72,493
IMPAIRMENT
Provision / impairment losses	9	(15,487)	(15,484)	(31,464)	(36,750)
OPERATING PROFIT FOR THE PERIOD BEFORE		─────────	─────────		─────────	─────────
	11,429	11,689	39,711	35,743
TAXATION
Taxation	10	(2,614)	(2,556)	(6,845)	(8,099)
NET PROFIT FOR THE PERIOD		─────────	─────────		─────────	─────────
	8,815	9,133	32,866	27,644
Attributable to:		════════	════════		════════	════════
	8,735	9,071	32,643	27,495
Shareholders of the Bank
Non-controlling interests		80	62	223	149
		─────────	─────────		─────────	─────────
		8,815	9,133	32,866	27,644
		════════	════════		════════	════════
BASIC AND DILUTED EARNINGS PER SHARE	11	3 fils	3 fils		13 fils	11 fils
ATTRIBUTABLE TO THE SHAREHOLDERS OF THE BANK
		════════	════════		════════	════════

The attached notes 1 to 14 form part of the interim condensed consolidated financial information. 4

Al Ahli Bank of Kuwait K.S.C.P. and its subsidiaries

INTERIM CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (UNAUDITED)

For the period ended 30 September 2023

		Three months ended		Nine months ended
		30 September		30 September
		2023	2022		2023	2022
		KD 000	KD 000		KD 000	KD 000
Net profit for the period	8,815	9,133	32,866	27,644
		─────────	─────────		─────────	─────────
Items that will not be reclassified subsequently to
interim condensed consolidated income statement:
Equity instruments at fair value through other
comprehensive income:
-	Effect of net changes in fair value	323	33	277	(436)
		─────────	─────────		─────────	─────────
		323	33	277	(436)
Items that are or may be reclassified subsequently to	─────────	─────────		─────────	─────────
interim condensed consolidated income statement:
Debt instruments at fair value through other
comprehensive income:	(211)		(3,836)
-	Effect of net changes in fair value	(2,554)	(10,546)

• Expected credit loss (release) charge on other

financial assets	(15)	17	(52)	(36)
- Recycling of net loss (gain) on sale	2,165	(2)	2,153	(145)
	─────────	─────────	─────────	─────────
Foreign currency translation:	1,939	(2,539)	(1,735)	(10,727)
- Exchange difference on translation of foreign	(94)		(9,581)
operations	(1,852)	(11,395)
	─────────	─────────	─────────	─────────
	1,845	(4,391)	(11,316)	(22,122)
	─────────	─────────	─────────	─────────
Other comprehensive income (loss) for the period	2,168	(4,358)	(11,039)	(22,558)
Total comprehensive income for the period	─────────	─────────	─────────	─────────
10,983	4,775	21,827	5,086
Attributable to:	════════	════════	════════	════════
10,864		21,764
Shareholders of the Bank	4,769	5,181
Non-controlling interests	119	6	63	(95)
	─────────	─────────	─────────	─────────
	10,983	4,775	21,827	5,086
	════════	════════	════════	════════

The attached notes 1 to 14 form part of the interim condensed consolidated financial information. 5

Al Ahli Bank of Kuwait K.S.C.P. and its subsidiaries

INTERIM CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (UNAUDITED)

For the period ended 30 September 2023

					Attributable to shareholders of the Bank
							Reserves
						Treasury		Cumulative
			Treasury			shares	Other	changes in				Perpetual	Non-
	Share	Share	shares	Statutory	Voluntary	reserve	reserves	fair	Retained	Total		Tier 1 capital	controlling
	capital	premium	(Note 8)	reserve	reserve	(Note 8)	(Note 8)	value	earnings	reserves	Total	notes	interests	Total equity
	KD 000	KD 000	KD 000	KD 000	KD 000	KD 000	KD 000	KD 000	KD 000	KD 000	KD 000	KD 000	KD 000	KD 000
Balance as at 1 January 2023	178,513	108,897	(5,135)	87,225	82,075	8,065	(25,698)	11,336	58,824	221,827	504,102	90,750	1,139	595,991
Net profit for the period	───────	───────	───────	───────	───────	───────	───────	───────	───────	───────	───────	───────	───────	───────
-	-	-	-	-	-	-	-	32,643	32,643	32,643	-	223	32,866
Other comprehensive loss for the period	-	-	-	-	-	-	(9,451)	(1,428)	-	(10,879)	(10,879)	-	(160)	(11,039)
Total comprehensive (loss) income for	───────	───────	───────	───────	───────	───────	───────	───────	───────	───────	───────	───────	───────	───────
-	-	-	-	-	-	(9,451)	(1,428)	32,643	21,764	21,764	-	63	21,827
the period
Bonus shares issued (Note 8)	8,926	-	-	-	-	-	-	-	(8,926)	(8,926)	-	-	-	-
Rights shares issued (Note 8)	50,000	50,000	-	-	-	-	-	-	-	-	100,000	-	-	100,000
Dividends (Note 8)	-	-	-	-	-	-	-	-	(14,164)	(14,164)	(14,164)	-	-	(14,164)
Transfer due to derecognition of	-	-	-	-	-	-	-	(216)	216	-	-	-	-	-
equity investments at FVOCI
Redemption of Perpetual Tier 1 Capital	-	-	-	-	-	-	-	-	(1,920)	(1,920)	(1,920)	(90,750)	-	(92,670)
Notes (Note 8)
Rights shares issuance cost	-	-	-	-	-	-	-	-	(203)	(203)	(203)	-	-	(203)
Interest payment on Perpetual Tier	-	-	-	-	-	-	-	-	(6,727)	(6,727)	(6,727)	-	-	(6,727)
1 Capital Notes
Balance as at 30 September 2023	───────	───────	───────	───────	───────	───────	───────	───────	───────	───────	───────	───────	───────	───────
237,439	158,897	(5,135)	87,225	82,075	8,065	(35,149)	9,692	59,743	211,651	602,852	-	1,202	604,054
	══════	══════	══════	══════	══════	══════	══════	══════	══════	══════	══════	══════	══════	══════

The attached notes 1 to 14 form part of the interim condensed consolidated financial information.

6

Al Ahli Bank of Kuwait K.S.C.P. and its subsidiaries

INTERIM CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (UNAUDITED) (CONTINUED)

For the period ended 30 September 2023

					Attributable to shareholders of the Bank
							Reserves
						Treasury		Cumulative
			Treasury			shares	Other	changes in				Perpetual	Non-
	Share	Share	shares	Statutory	Voluntary	reserve	reserves	fair	Retained	Total		Tier 1 capital	controlling
	capital	premium	(Note 8)	reserve	reserve	(Note 8)	(Note 8)	value	earnings	reserves	Total	notes	interests	Total equity
	KD 000	KD 000	KD 000	KD 000	KD 000	KD 000	KD 000	KD 000	KD 000	KD 000	KD 000	KD 000	KD 000	KD 000
Balance as at 1 January 2022	170,012	108,897	(5,135)	83,823	82,075	8,065	(2,025)	18,822	53,526	244,286	518,060	90,750	1,475	610,285
	───────	───────	───────	───────	───────	───────	───────	───────	───────	───────	───────	───────	───────	───────
Net profit for the period	-	-	-	-	-	-	-	-	27,495	27,495	27,495	-	149	27,644
Other comprehensive loss for the period	-	-	-	-	-	-	(11,221)	(11,093)	-	(22,314)	(22,314)	-	(244)	(22,558)
Total comprehensive (loss) income for	───────	───────	───────	───────	───────	───────	───────	───────	───────	───────	───────	───────	───────	───────
the period	-	-	-	-	-	-	(11,221)	(11,093)	27,495	5,181	5,181	-	(95)	5,086
Bonus shares issued	8,501	-	-	-	-	-	-	-	(8,501)	(8,501)	-	-	-	-
Dividend paid (Note 8)	-	-	-	-	-	-	-	-	(8,431)	(8,431)	(8,431)	-	-	(8,431)
Interest payment on Perpetual Tier
1 Capital Notes	-	-	-	-	-	-	-	-	(6,722)	(6,722)	(6,722)	-	-	(6,722)
Transfer due to derecognition of equity
investments at FVOCI	-	-	-	-	-	-	-	(63)	63	-	-	-	-	-
	───────	───────	───────	───────	───────	───────	───────	───────	───────	───────	───────	───────	───────	───────
Balance as at 30 September 2022	178,513	108,897	(5,135)	83,823	82,075	8,065	(13,246)	7,666	57,430	225,813	508,088	90,750	1,380	600,218
	══════	══════	══════	══════	══════	══════	══════	══════	══════	══════	══════	══════	══════	══════

The attached notes 1 to 14 form part of the interim condensed consolidated financial information.

7

Al Ahli Bank of Kuwait K.S.C.P. and its subsidiaries

INTERIM CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)

For the period ended 30 September 2023

		Nine months ended
	Notes	30 September
		2023	2022
OPERATING ACTIVITIES		KD 000	KD 000
	39,711
Profit for the period before taxation		35,743
Adjustments for:		2,153
Net loss (gain) on sale of investment securities		(145)
Dividend income		(1,245)	(1,593)
Share of results from an associate		(2,349)	(2,614)
Depreciation and amortisation		4,392	5,480
Provision / impairment losses	9	31,464	36,750
Operating profit before changes in operating assets and liabilities		─────────	─────────
	74,126	73,621
Changes in operating assets and liabilities:		(65,349)
Deposits with banks		315,803
Kuwait Government treasury bonds		3,000	34,000
Central Bank of Kuwait bonds		3,364	(43,352)
Investments at fair value through profit or loss		(376)	5,691
Loans and advances		(377,386)	(590,359)
Other assets		(8,604)	(15,418)
Due to banks and other financial institutions		112,972	273,267
Customers' deposits		(329,030)	415,284
Other liabilities		34,927	27,602
Taxes paid		(3,368)	(7,917)
Net cash flows (used in) from operating activities		─────────	─────────
	(555,724)	488,222
INVESTING ACTIVITIES		─────────	─────────
	(748,786)
Purchase of investment securities		(648,982)
Proceeds from sale of investment securities		659,407	344,141
Dividend received from associate		1,201	958
Net purchase of premises and equipment		(5,363)	(4,547)
Dividend income received		1,245	1,593
Net cash flows used in investing activities		─────────	─────────
	(92,296)	(306,837)
FINANCING ACTIVITIES		─────────	─────────
	100,000
Proceeds from issuance of rights shares	8	-
Redemption of Tier 1 capital notes	8	(92,670)	-
Interest paid on Tier 1 capital notes		(6,727)	(6,722)
Dividend paid		(14,164)	(8,431)
Rights shares issuance cost		(203)	-
Syndicated borrowings		184,848	-
Settlement of Euro Medium Term Note		-	(153,325)
Net cash flows from (used in) financing activities		─────────	─────────
	171,084	(168,478)
		─────────	─────────
Foreign currency translation difference		(30,121)	(10,726)
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS		─────────	─────────
	(507,057)	2,181
Cash and cash equivalents as at 1 January		984,874	761,749
CASH AND CASH EQUIVALENTS AS AT 30 SEPTEMBER		─────────	─────────
	477,817	763,930
Cash and cash equivalents comprise:		════════	════════
	59,037
Cash in hand and in current account with other banks		118,366
Balances with the Central Banks (original maturity not exceeding thirty days)		372,277	306,743
Deposits with banks (original maturity not exceeding thirty days)		46,503	338,821
		─────────	─────────
		477,817	763,930
		════════	════════

The attached notes 1 to 14 form part of the interim condensed consolidated financial information. 8

Al Ahli Bank of Kuwait K.S.C.P. and its subsidiaries

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL

INFORMATION (UNAUDITED)

30 September 2023

1 INCORPORATION AND REGISTRATION

Al Ahli Bank of Kuwait K.S.C.P. ("the Bank") is a public shareholding company incorporated in Kuwait on 23 May 1967 and is registered as a Bank with the Central Bank of Kuwait (CBK). Its registered office is at Al Safat Square, Ahmed Al Jaber Street, Kuwait City. It is engaged in banking in Kuwait, United Arab Emirates and Egypt.

The interim condensed consolidated financial information of the Bank and its Subsidiaries (together the "Group") for the period ended 30 September 2023 were authorised for issue by the chairman on 26 October 2023 in accordance with a resolution of the Bank's Board of Directors on 11 October 2023.

2 BASIS OF PREPARATION

The interim condensed consolidated financial information of the Group has been prepared in accordance with International Accounting Standard 34 "Interim Financial Reporting" except for the point below.

The interim condensed consolidated financial information of the Group for the period ended 30 September 2023 were prepared in accordance with the regulations for financial services institutions as issued by the Central Bank of Kuwait (CBK) in the State of Kuwait. These regulations require banks and other financial institutions regulated by CBK to adopt the International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB) with the following amendment:

Expected credit loss ("ECL") to be measured at the higher of ECL provision on credit facilities computed under IFRS 9 - Financial Instruments ("IFRS 9") in accordance with CBK guidelines or the provisions as required by CBK instructions along with its consequent impact on related disclosures;

The above framework is hereinafter referred to as 'IFRS as adopted by CBK for use by the State of Kuwait'.

The interim condensed consolidated financial information does not contain all information and disclosures required for full financial statements prepared in accordance with IFRS, and should be read in conjunction with the Group's annual consolidated financial statements for the year ended 31 December 2022. Further, results for the nine month period ended 30 September 2023, are not necessarily indicative of the results that may be expected for the financial year ending 31 December 2023.

2.1 NEW STANDARDS, INTERPRETATIONS AND AMENDMENTS ADOPTED BY THE GROUP

The accounting policies used in the preparation of this interim condensed consolidated financial information are consistent with those used in the previous financial year, except for the amendments to IFRSs which are effective for annual accounting period starting from 1 January 2023. The Group has not early adopted any standard, interpretation or amendment that has been issued but is not yet effective.

Several amendments apply for the first time in 2023, but do not have an impact on the interim condensed consolidated financial statements of the Group.

Definition of Accounting Estimates - Amendments to IAS 8

The amendments to IAS 8 clarify the distinction between changes in accounting estimates, and changes in accounting policies and the correction of errors. They also clarify how entities use measurement techniques and inputs to develop accounting estimates.

Disclosure of Accounting Policies - Amendments to IAS 1 and IFRS Practice Statement 2

The amendments to IAS 1 and IFRS Practice Statement 2 Making Materiality Judgements provide guidance and examples to help entities apply materiality judgements to accounting policy disclosures. The amendments aim to help entities provide accounting policy disclosures that are more useful by replacing the requirement for entities to disclose their 'significant' accounting policies with a requirement to disclose their 'material' accounting policies and adding guidance on how entities apply the concept of materiality in making decisions about accounting policy disclosures.

9