April 16, 2021

Salah Al-Fulaij: “The National” has turned every challenge into an opportunity … that supports its future


– Coronavirus accelerated our orientation towards a future we had anticipated and prepared for a long time ago

– We are proud to instill a digital mindset and culture that supports our efforts for an AI-based transformation

– Al-Markazi is a major partner and supporter of banks in developing their digital infrastructure and innovation

Technology will not completely replace human capabilities, but rather it enhances and refines our analytical capabilities

Recovering economic growth and increased government spending support business credit growth in 2021

– We will continue our future focus on consolidating our leadership in financing mega projects locally and regionally

We maintain our dominance locally thanks to our budget and strong relationships with our clients locally and internationally

We seek to maintain our leadership as the bank of choice for large companies and continue to penetrate the medium-sized entities sector

The CEO of the National Bank of Kuwait – Kuwait, Salah Al-Fulaij, confirmed that the bank’s digital investments during the past years paid off during the Corona crisis, as its digital channels played a pivotal role and provided effective and practical alternatives to its branches during the closing periods.

Al-Fulaij added in an interview with the international magazine “The Banker” that electronic transactions increased to record levels, a trend that continues even after returning to normal levels of economic activities, pointing out that 85 percent of total banking operations in 2020 were implemented through my “NBK” service. Via Mobile and NBK Online.

Al-Fulaij affirmed that customers ’reliance on mobile has increased more in completing their transactions, so that the“ NBK Mobile Banking ”program has become the bank’s largest branch and most important electronic channel, with the capabilities it provides to include opening an account online and obtaining loans without the need to visit the branches.

He pointed out that the great development witnessed by the “NBK Mobile Phone” program is reaping its benefits with the increase in the number of its users 38 percent during the year 2020, while the number of transactions that took place via mobile increased by 51 percent, and payments for online shopping using cards have steadily increased. It reached 94 percent, while contactless payments saw a 200 percent year-on-year jump.

Plans continue

Al-Fulaij pointed out that “the crisis did not impede the implementation of our plans in the digital path, and we were keen to accelerate the implementation of our comprehensive vision to develop the traditional concept of branches so that they are integrated with electronic channels to provide an integrated and exclusive banking experience for the bank’s customers.”

He noted that the bank has opened its latest branch, which is a model for future branches, and is completely different from traditional branches in terms of design and interactive service delivery based on the latest technological solutions, in a way that guarantees customers the speed and ease of completing their transactions.

He stressed that the epidemic accelerated the direction of the “national” towards a future that he had anticipated and prepared for a long time, which will help him to take steps and increase the differences from his competitors towards pushing his journey towards a more comprehensive, digital and sustainable era, noting that in the midst of historical challenges also arise opportunities that arise. Reshaping the future, and that the Bank turned every challenge into an opportunity that supports future growth.

Future ambitions

The CEO of “NBK-Kuwait” explained that the digital transformation process is one of the most important elements of the bank’s long-term strategy, indicating that it stands today on solid ground to launch towards achieving its future ambitions, referring to placing pioneering digital initiatives at the top of its agenda, especially in the field of Retail banking.

Al-Fulaij said, “We are working tirelessly to prepare for the next generation of financial technology, and for this we have established our digital laboratory in Kuwait, to serve the digital transformation agenda across the entire group, so that the lab will act as a bridge through which partnerships are concluded with innovators and innovators in the financial technology field , With the possibility of applying internal integration by matching external innovation with business requirements, in order to help us improve our way of working, provide better services and enrich our customers’ experience.

Al-Fulaij stressed that the bank is proud to establish a digital mentality and culture across all jobs and at all levels, to support its efforts to create a digital transformation based on artificial intelligence and data analytics, which will confirm its superiority at the local and regional levels.

He stressed that the bank will continue to invest in digital banking services on the front end, but even in support offices such as banking robots and process automation, explaining that it will continue to invest in data analysis and processing to better understand customers’ needs and behavior, and work continuously to develop its services in digital wealth management solutions. And represented by the “Smart Wealth” service, in partnership with its investment arm, “NBK Capital”, and private banking services, in a way that supports its endeavor to retain younger customers during their wealth growth journey.

He pointed out that the bank will continue developing solutions for rapid financial transfers by relying on blockchain technologies, and utilizing the newly inaugurated data center to make better use of analyzes to design and adapt offers and services, reduce costs and reduce risks, while continuing to make continuous improvements to the NBK NBK service program. Via mobile »and developing branches to integrate with electronic channels in order to enrich the customer experience.

Close cooperation

Al-Fulaij stated that Kuwaiti banks have been working closely with the Central Bank of Kuwait over the years to develop digital infrastructure and to embrace and encourage innovation, so that the latter gives flexibility in terms of regulatory requirements.

He indicated that Kuwait is striving to be at the forefront of digitization and help push technological innovation to the forefront, and that it suffices to say that about 70 percent of the age group between 15 to 24 years old have bank accounts, compared to a global average of 54 percent, as it represents This segment is the target market for fintech products and services, as they are willing to experiment with new financial offerings and are constantly looking for how to obtain them in an appropriate and comfortable manner.

He believed that banks need flexibility to deal with both the challenges and unexpected opportunities, and make corrections during the digital transformation journey, revealing that to reach this goal, they need a flexible and simplified IT infrastructure based on the existence of a data platform, in essence, digital enablers, provided that it is It is scalable and contains a modern infrastructure for storing and processing all data.

Al-Fulaij stressed that technology will not completely replace human capabilities, but rather it will enhance and refine Al-Watani’s analytical capabilities.

Loan levels

He added that with regard to individual credit, despite the expectation to continue lending to citizens, due to its strong performance in view of relatively safe jobs and the increase in the population, the rate of lending to residents is expected to be relatively weak during the next year.

Regarding the performance of the bank’s loan portfolio in 2020, Al-Fulaij confirmed that it rose to $ 57.7 billion, an increase of 5.7 percent compared to December 2019, as the traditional operations in Kuwait, whether for individuals or companies, were among the most important contributors to the growth of the loan portfolio.

In terms of loan growth, he expected that during the year 2021, NBK would witness a growth ranging from average to high in the single digits for the next twelve months.

Conservative policy

Regarding the bank’s non-performing loan rate in 2020, Al-Fulaij confirmed that according to our regional and international standards, a very low percentage of non-performing loans reached in 2020 about 1.72 percent, which is slightly higher than 2019 levels, revealing a very comfortable coverage ratio of 220. percent.

He explained that the slight increase in the level of bad loans out of the total loan portfolio is due to the preemptive and conservative approach, and the uncertainty caused by the epidemic, as this was also reflected in the high levels of provisions, the majority of which are precautionary.

He pointed out that during the second and third quarters of 2020, there was great uncertainty and a state of uncertainty regarding the operating environment, which prompted the bank to follow a very conservative policy regarding the availability of liquidity for some customers, which ultimately led to the avoidance of high levels of Allocations.

Al-Fulaij affirmed that the fourth quarter of 2020 witnessed an improvement in the pace of allocating allocations compared to the second and third quarters of the year after seeing signs of recovery, hoping that this recovery will continue in 2021, and explaining that the repercussions of the global pandemic are unfolding globally. Therefore, NBK has cautious optimism about expectations. Future allocations.

He added that despite the high provisions for credit losses and depreciation, the group’s financial position is still strong, and it enjoys high levels of credit quality in addition to strong capitalization levels that characterize NBK, in addition to its ability to achieve operational profits that contribute to enhancing its absorption capacity. For potential credit losses.

Future aspirations

Al-Fulaij stressed that Al-Watani’s future aspirations will continue to focus on leading the project financing sector, the last of which was arranging and issuing joint financing for the benefit of the Kuwait Petroleum Corporation, worth one billion dinars.

He pointed out that the bank continues to maintain its dominance over the local market in this sector, thanks to the large balance sheet, and the strong relationships it maintains at the local and international levels.

He stated that the foreign business unit contributes to supporting and strengthening this distinctive local position, and the availability of its services to about 75 percent of the companies operating in the market, and is distinguished by a strong leadership in the field of letters of credit and letters of guarantee.

In terms of local companies, Al-Fulaij stressed the bank’s endeavor to maintain its leadership as a favorite for large companies, and to continue to penetrate the medium-sized companies sector.

Credit growth is between 4 and 5 percent

On the most prominent drivers of credit growth in 2021 and 2022, Al-Fulaij stressed that it is not expected that the current low interest rates levels will witness any upward trend in the near future, as the discount rate is about 1.5 percent, which is the lowest level historically. The low will be a catalyst for credit growth in the coming period.

He explained that expectations indicate that credit growth in Kuwait will range between 4 and 5 percent in 2021, as business credit growth is likely to benefit from the recovery of economic growth and the increase in government spending in the current year, despite the expected decline in financing working capital in the event of Emergency, a phenomenon that occurred strongly in the past year due to the Corona pandemic.

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