National Bank of Kuwait SAKP (NBK) Q1 2025 earnings summary

Executive summary

• Net profit for Q1 2025 was KD 134.1 million, down 8.5% year-over-year, mainly due to the new Domestic Minimum Top-up Tax (DMTT) raising the effective tax rate to 16.3% from 9.2% in Q1 2024.

• Profit before tax grew 0.8% year-over-year to KD 173.4 million, reflecting resilient core operations despite tax headwinds.

• Net operating income grew slightly by 0.6% year-over-year to KD 311 million.

• Return on average assets declined to 1.33% from 1.55% and return on average equity fell to 13.1% from 15.2% year-over-year.

• The bank remains committed to digital transformation, sustainability, and leveraging its diversified business model.

Financial highlights

• Net operating income reached KD 310.7 million, marginally higher year-over-year, driven by higher non-interest income.

• Net interest income and net income from Islamic financing totaled KD 236.8 million, nearly flat year-over-year.

• Non-interest income rose to KD 74 million, with strong fee, commission, and FX contributions.

• Operating expenses increased 4% year-over-year to KD 116 million; cost-to-income ratio at 37.3%.

• Credit provisions and impairment losses totaled KD 21.5 million, down KD 4 million year-over-year.

Outlook and guidance

• Loan growth for 2025 guided to mid-single digits, despite strong Q1 growth of 3.8%.

• NIM expected to remain under pressure, with full-year NIM likely around Q1's 2.45%.

• Annual cost growth expected at ~10%, with cost-to-income ratio in the high 30s%.

• Cost of risk expected to remain stable at current levels (40 bps).

• Effective tax rate for 2025 estimated at 16-17% of pre-tax profit.