Kuala Lumpur, 14 July 2010. Kuwait Finance House (Malaysia) Berhad (KFHMB) has announced 1Q 2010 financial results today, which showed the Bank achieving a total revenue of RM108.9million for the first quarter of 2010. The Bank also made a higher provisioning for Non-Performing Financing (NPF) of RM93.8million resulting in a net loss of RM63.3million for the first quarter. For the first quarter of 2010, KFHMB achieved a total distributable income to depositors amounting RM42.2million.

Puan Jamelah Jamaluddin, Chief Executive Officer (CEO) of KFHMB said, “This is a challenging year for us, but we are proactive and have taken an aggressive provisioning stance, because our capital position is very strong. As earlier indicated in our press statement dated 13 May 2010, the Bank has adopted such a measure, in line with our Impaired Financing Management strategy for the first half of 2010. Since my appointment as CEO in February 2010, we have re-organised the Bank with a new management team. Apart from this, a holistic plan has been implemented to strengthen the Bank. The Business Plan which is more streamlined as well as focused, and in alignment with our parent company, reinforces Corporate governance in all areas. Various departments and controls are being set up, to actively manage the quality of our assets. We are also enhancing our Human Capital, in our journey to achieve optimum productivity.”

Puan Jamelah said, “Our banking business recorded strong asset inflows, underscoring the trust that clients place in KFHMB. On the business front, whilst tapping on a different class of investors, we are leveraging on the strong product offerings of the KFH Group. As such, we will introduce products and delivery channels that will make us different.”

KFHMB’s current core capital ratio and risk-weighted capital ratio (RWCR) is also the highest amongst Islamic banks and remains strong, standing at 18% and 22% as at 31 March 2010, which is significantly above the Islamic banking industry average of 12.4% and 15%.

The Bank is well-capitalised with a Tier 1 capital of RM1.96 billion and Tier 2 capital of RM450.1 million making a total capital of RM2.41 billion as at 31 March 2010. This makes KFHMB the largest Islamic bank in Malaysia, in terms of capital. The capital of KFHMB is also the largest amongst all KFH subsidiaries, reflecting the unwavering commitment and dedicated support from the parent. With the strong shareholder support from KFH Group, KFHMB sees Malaysia as an important platform for long-term expansion in the Asia-Pacific region. Kuwait Finance House is the second largest Islamic bank in the world, with total assets of USD 39.20 billion (RM134.88 billion) as at 31 December 2009.

“We are well-positioned to master the current challenges we face, and to consistently exploit future growth opportunities. We accelerated the implementation of our business plan, which will bring about a further substantial reduction of our risk and cost base. We also took steps to further strengthen our control culture. We have positioned our businesses to be less susceptible to negative market trends, if they persist in the coming months, and to prosper when markets recover. We have started the transformation process in the Bank and will be more performance-driven. All these will help us in our next phase of growth over the course of the five years, since we are very committed to Malaysia. The high level of liquidity has enabled KFH to support the financing needs of individuals and institutions, and we will continue the mandate of providing innovative Shariah-based financial solutions to our depositors and customers,” added Puan Jamelah.