Good afternoon, everyone. This is Elena Sanchez from EFG Hermes, and I would like to welcome you all to National Bank of Kuwait's second quarter 2025 results call. It is a pleasure to have with us in the call as speakers from National Bank of Kuwait, Mr. Isam Al-Sager, Vice Chairman and Group CEO; Mr. Sujit Ronghe, Group CFO; and Mr. Amir Hanna, Group Chief Communications Officer. I would like to hand over the call to Mr. Amir Hanna. Please go ahead.
Thank you, Elena. Good afternoon, everyone, and thank you for joining us for today's webcast. We will start the call with our usual disclaimer, as I would like to bring to your attention that certain comments in this presentation may constitute forward-looking statements. These comments reflect the bank's expectations and are subject to risks and uncertainties that may cause actual results to differ materially and may adversely affect the outcome, and the financial effects of the plans described herein. The bank does not assume any obligation to update its view of such risks and uncertainties or to publicly announce the results of any revisions to the forward-looking statements made herein. Please also refer to the full disclaimer in our presentation for today's call. Today's call will follow our usual agenda.
Our Vice Chairman and Group CEO, Mr. Isam Al-Sager, will start the call by giving some opening remarks on the operating environment and the highlights of the reporting period. Then Mr. Sujit Ronghe, our Group CFO, will go through the financials in more details. Following our presentation, there will be a Q&A session through Webex platform. If you have any follow-up questions after the call, please direct it all to our investor relations email address and we will answer them at the earliest. Today's presentation has also been uploaded to our website, for your convenience. Now let me hand over the call to Mr. Isam for his opening remarks.
Thank you, Amir. Good afternoon, everyone. I am glad to join you today for NBK's second quarter 2025 earnings call. In recent months, the global economic landscape has remained complex, shaped by evolving trade dynamics, ongoing monetary policy shifts, and heightened geopolitical tension. The escalation of conflict in the Middle East has intensified concern around energy security and supply chain disruptions. In parallel, tariffs adjustment and protective trade measures are expected to continue to rising inflation and slower economic growth. These developments have added to the uncertainty surrounding the global economic outlook. For the GCC region, the outlook remains cautiously optimistic, backed by solid physical reserves, ongoing economic reforms, and stable demand in the energy sector. GCC economies are expected to remain resilient growth momentum into 2025. In Kuwait, economic momentum remains relatively muted in 2024. However, the short-term outlook suggested to solid recovery in 2025.
Recent preliminary official estimates show that headline GDP growth by 1% year-on-year in the first quarter 2025, making the first expansion since the second quarter 2023. The improvement is supported by fading effective and voluntary OPEC+ production cuts, as rebounded in consumer demand, stronger credit growth, and pickup in project activity. Public investment is also set to gain traction, supported by ongoing and expected sovereign issuance. As a result, GDP growth could accelerate with non-oil activity projected to grow by 2.5%, while oil growth increases by 1.2%, and overall growth potentially reaching 1.9% in 2025. Following a strong year of projects market activity in 2024, specifically in the second half of 2024, momentum softened to some extent in the first half of 2025.
Despite this modernization, which largely reflects the normalization for the elevated level seen in 2024, the outlook remains encouraging, with an estimated KWD 10 billion worth of projects in the pipeline. This continues signs the government sustained commitment to advancing its development and reform agenda. Moving on to our performance, NBK reported net profit of KWD 315.3 million in the first half of the year, compared with KWD 292.4 million in the corresponding period of 2024, growing by 7.8%. However, the impact of the new tax regime continues to affect profitability with an effect tax rate increasing to 16% in the first half of 2025, up from 9.2% in the first half of 2024. If we look beyond this impact of the newly implemented tax, our profit before tax line grow by 17% year-on-year, reaching KWD 401.5 million in the first half of 2025.
Moreover, our pre-tax profit benefited from release of credit losses and impairment losses of KWD 10 million, compared to provision charges of KWD 43 million in the six months period ended 30th June 2024. Our return remains strong with return on average assets for the period reaching 1.52%, while our return on average equity reaching 15.1%. At NBK, we remain confident in our capacity to adapt and take the lead within domestic market throughout agility, continuous investment in technology and innovation, and our commitment to meet our clients' evolving needs. We are prepared not only to navigate economic changes, but to emerge even stronger. Our presence across both regional and international markets will remain a key driver in mitigating risk, maintaining stable returns, and managing operational efficiency. We aim to continue capitalizing on the advantages of cross-selling our services across geographies.
In parallel, our wealth management division will draw on its expertise to offer comprehensive approach to portfolio management, advisory services, and investment solutions. At the same time, our Islamic banking, Boubyan, will continue to strengthen our distinctive domestic footprint and continue to the diversification of our profitability streams. During the quarter, NBK successfully completed landmark of $ 800 million additional tier-one bond issuance, its largest to date in this capital tier. Following strong investment demand, the issuance was oversubscribed by 2.75 times, reflecting robust interest from global investors and confidence in NBK's credit profile. NBK remains strongly committed to sustainability and to advancing its sustainable finance agenda. To further demonstrate transparency and accountability in its sustainable finance and ESG agenda, NBK recently published its first green bond allocation and impact report as well as its first TCFD report.
These disclosures reflect meaningful progress in embedding climate considerations into our operation, with a strong focus on portfolio diversification and climate risk management. With this, I will conclude my comments and leave you with my colleague, Sujit Ronghe, our Group CFO, to cover our half-year results in more details. Please go ahead, Sujit.
Thank you, Mr. Isam. Hello, everyone, and welcome. I am very pleased for the opportunity to take you through financial results for the first half of 2025. We have announced a net profit of KWD 315 million for 1H 2025, an increase of 7.8% over the corresponding period of 2024. The operating engine of the group remains solid, with strong growth in business volumes, particularly loans and investments. Before going on to details of our financial results, I would first like to say a few words regarding the overall operating environment. Although global and regional geopolitical situation remain unstable, the overall operating environment in Kuwait and GCC has been relatively stable. Macroeconomic uncertainties have increased, and heightened concerns regarding the implication of a possible tariff war are affecting global operating environment adversely. NBK continued to navigate competently through the uncertain situation, reflecting resilience and the strength of our business model.
Now turning to the financial results for first half of 2025. As shown at the top left of this slide, net profit at KWD 315 million reflects a year-on-year increase of KWD 23 million, that is 7.8%. The bottom line profit, although negatively affected by the 15% domestic minimum top-up tax from January 2025, has benefited from a net release of KWD 10 million in provisions for credit and impairment losses. Profit before tax at KWD 402 million reflected a year-on-year growth of 17%, benefiting from a net release in provisions for credit and impairment losses. The effective tax rate has increased to 16% in the current period from 9.2% in 1H 2024 due to changes in tax laws.
The pie chart at the bottom left reflects strong contributions to 1H 2025 net profit from NBK's key business segments, which serve as main pillars of diversification and provide a significant degree of resilience to group earnings. NBK Group continues to benefit from its unique position amongst Kuwaiti banks in terms of geographical spread and ability to conduct business in both conventional and Islamic banking. The chart at the bottom right shows that net operating income at KWD 631 million is 3.1% higher than that of the previous year, boosted by a sound contribution from both non-interest income and net interest income. You would note that the net interest income and non-interest income mix has remained stable overall during the year. I will discuss the main drivers behind movements in income statement on the next slide. We will now look at the net interest income and drivers behind its performance.
The chart at the top left reflects the net interest income and the net income from Islamic financing of KWD 490 million was 1.5% higher than 1H 2024. Current year's NII benefited from 11% year-on-year growth in average earning assets, particularly loans and investments across the Group. However, an unfavorable change in the mix of different categories of assets maintained with the Central Bank of Kuwait, year-on-year effect of last year's Egyptian pound devaluation, and relatively lower benchmark interest rates adversely impacted the net interest income and the NIM in 2025. On the positive side, following the passage of the debt law in Kuwait, CBK has started issuing Kuwaiti dinar government treasury bonds with KWD 700 million issued since June 21, 2025. We are hopeful of continued debt issuances during the year, allowing the bank to deploy liquidity into interest-earning assets.
We see in the top right chart that the average NIM for 1H 2025 dropped to 2.46%, reflecting a decline of 23 basis points over 1H 2024, driven by a steeper decrease in yield for reasons explained earlier compared to the funding cost. Group yield and funding cost for the current six months period were 5.72% and 3.66% respectively. The Group continues to source deposits efficiently, balancing cost and regulatory requirements while diversifying the funding base. Also, an overall sticky and stable base of retail customer deposits continues to benefit the Group. At the bottom left, we can see drivers behind a 23 basis point decrease in the NIM to 2.46% in 1H 2025. Loans and other interest-earning assets affected by lower interest rates and an unfavorable asset mix contributed to a net decrease of 12 basis points and 42 basis points to the NIM respectively.
Lower funding cost affected the NIM positively by 31 basis points. Moving to the next slide. Sorry, I'll just go back to the slide to discuss the chart at the bottom right. Total non-interest income at KWD 142 million for 1H 2025 was 8.9% higher than the comparable period in 2024. Fees and commissions income was strong at KWD 107 million, reflecting robust contributions from different lines of business and geographies. FX contributed KWD 19 million benefiting from higher transaction volumes. Other non-interest income sources, mainly investment income, contributed KWD 16 million, supported by improved investment valuations. Moving to the next slide. Now turning to operating expenses reflected in the top left chart. Total operating expenses for 1H 2025 at KWD 240 million are 6% higher than 1H 2024.
The moderate cost growth reflects in part the Group's efforts to harvest efficiencies, favorable effect of EGP devaluation, and certain timing differences.
The Group continues to invest in key business initiatives, digital technologies, and processes which enable us to offer best-in-class service to customers and optimize resources to improve operational efficiency. Moving on to provisions and impairments, which are profiled on the top right-hand side of the slide. Total credit provisions and impairment losses for 1H 2025 is a net release of KWD 10 million versus a charge of KWD 43 million in 1H 2024. The net release of KWD 20 million for the current six months period was contributed by credit facilities, whereas ECL on non-credit facilities and other impairment losses amounted to a charge of KWD 9 million. Current year's net release of KWD 36 million in specific provisions from recoveries of amounts provided towards credit losses during previous years.
At the same time, the group has taken provisions in ordinary course of business for retail and corporate customers in Kuwait and overseas locations. The group remains committed to its conservative approach in managing credit exposures. Net release of credit losses resulted in a negative cost of risk for 1H 2025. It is worth noting that the group's balance sheet remains strong with a stable credit quality. NBK's capital base, along with the ability to generate healthy operating profits, provides a strong credit loss absorption capacity. I will now discuss ECL on credit facilities. As per the regime adopted by the CBK, banks calculate credit provisions required, that is the amount in the balance sheet as per CBK instructions, and compare it with the ECL on credit facilities as per IFRS 9. Consequently, the charge to income statement is based on higher of the two balance sheet amounts.
It is important to note here that CBK guidelines for calculating ECL on credit facilities as per IFRS 9 are on a more conservative basis compared to the original accounting standard. The chart at the bottom left shows that stage two and stage three loans are 6% and 1% of the group's gross loans, respectively, and have remained stable during the year. The key chart on this slide at the bottom right reflects that ECL provision required as of June 2025 was KWD 682 million. Although IFRS 9 ECL and CBK provisions are two different regimes and should not be compared as such, as of June 2025, the balance sheet provisions as per CBK instructions exceeds the ECL by KWD 246 million. This provides ample cushion for the group to withstand any possible adverse effect of prevailing uncertainties on ECL provision requirements. Now, moving to the next slide.
Here, we will look at NBK's balance sheet profile and key movements during the year. As profiled on the chart at top left, group total assets reached KWD 43.6 billion as of June 2025, a 15.9% increase over June 2024. Group loans and advances at KWD 25.5 billion registered a strong growth of KWD 2.8 billion, that is 12.1% year-on-year and 7.5% during the current six months period. Loan growth was achieved at Kuwait in both conventional and Islamic sectors and at international operations. Similarly, investment securities grew 24.9% year-on-year and 13% during the half year to reach KWD 8.6 billion. The overall composition of the balance sheet has remained stable during the year. You would note from the pie chart at bottom left that NBK's total asset composition is well diversified between Kuwait and international, and conventional and Islamic banking.
Similarly, the chart for loan exposure by sector reflects a well-diversified portfolio with personal loans as the largest segment, comprising 30% of total gross loans. It is important to note that a significantly high portion of personal loans is to a large number of Kuwaiti individuals who are predominantly employed with the government. These are essentially salary-backed loans with low default rates. With respect to liabilities, customer deposits, that is non-bank and non-FI deposits, at KWD 23.9 billion comprise 62% of total liabilities and reflect a year-on-year growth of 9.5%. Deposits from other non-bank FI comprise 8% of total liabilities and have grown by 10.8% year-on-year. These two funding sources are well diversified across different customer segments and geographies. The group continues to benefit from its strong base of core franchise retail deposits.
CASA deposit levels have been stable during the last year, with June 2025 volumes exceeding that of June 2024 and December 2024. Commercial papers and certificates of deposit at KWD 2 billion are another source of funding diversification and have been resilient during the recent market volatility. NBK's stable deposit and funding base reflects a continued focus on deposit gathering aspects of our business, leveraging our long-standing ability to capitalize on the group's strong brand, customer appeal, and credit ratings. As shown in the chart at bottom right, NBK Group continues to maintain healthy liquidity levels and comfortably exceeds the minimum requirements of Basel III liquidity ratios. Moving on to the next slide. We will now look at the impact 1H 2025 financial results had on certain key performance metrics.
Although increased tax charge in Kuwait, Bahrain, and in part U.A.E. has adversely affected the net profit, the group bottom line has benefited from a net release in loan provisions. Consequently, return on average assets and average equity for the current year are at 1.52% and 15.1% respectively. The chart at the top right reflects that despite a moderate cost growth, 1H 2025 cost to income ratio was at 38%, mainly resulting from pressure on net interest income during the current year. At 16.4%, the total capital adequacy ratio remains strong and stable, well above the regulatory minimum. CET1 and Tier 1 ratios at 12.4% and 14.3% respectively. Interim capital adequacy ratios tend to be lower than the year-end ratios as they are negatively affected by the growth in risk weight assets, whereas interim profit is not included in the regulatory capital.
1H 2025 reflected a strong growth in loans and investment securities. In order to enable the group to capture future prospects without any constraints on interim capital ratios, NBK board has not declared an interim dividend for 1H 2025 and will focus on year-end dividend distributions. As regards asset quality, NPL ratio remains stable at 1.33%. Loan loss coverage ratio is at 252%, reflecting conservative provisioning policy of the group. Now to the final slide in this section. Before concluding, allow me to summarize our financial performance for 1H 2025. Although a change in the composition of interest earning asset mix and the implementation of new tax laws had a negative effect, 1H 2025 bottom line benefited from a net release of provision for credit and impairment losses. 1H 2025 financial performance also reflected a healthy balance sheet growth, comfortable funding, and liquidity levels, together with a strong capital base.
Looking forward, ongoing regional and international politics, ambiguity regarding implications of tariffs levied by U.S. and response from affected countries, possibility of a recession, and uncertain interest rate scenario are likely to result in a macroeconomic environment which is less conducive to growth. We, however, remain cautiously optimistic that overall operating environment, although challenging, will stabilize during the course of 2025. Now, turning to the guidance for the full year. As regards to loan growth, the group continues to enjoy a strong pipeline of approved credits, and given the strong performance in the current half year, we are upgrading the full year 2025 growth guidance to be in the high single digit.
Turning to the NIM, given the uncertainty with macroeconomic situation, interest rate outlook, and the changed CBK asset mix mentioned earlier, and increased competition, we are expecting NIM to be under pressure compared to 2024, some of which is reflected in the 1H 2025 NIM of 2.46% and expected to continue during the rest of the year. Regarding operating expenses, the 1H 2025 year-on-year growth of 6% was lower than normal and not indicative of the fuller year expectation. While the group works to harness efficiencies, we continue to invest in human resources and digital technologies. Hence, we expect the annual cost growth percentage to be in high single digit and the cost to income ratio to remain in high 30s.
Coming to the cost of risk, the 1H 2025 reflected a negative cost of risk due to a net release in credit provision, the magnitude of which is generally non-recurring.
Given the current global macroeconomic uncertainty, we are cautiously optimistic of the underlying cost of risk for 2025 to range around 40 basis points, which we consider as normal. As regards the recently introduced DMTT, we estimate the effective tax charge for 2025 to range between 16%-17% of pre-tax profit. However, it would not be prudent to give a specified guidance on earnings capital adequacy in the current environment. We are hopeful of maintaining capital adequacy ratios in line with our internal targets above the regulatory minimum. That ends my presentation. Thank you very much. Back to Amir.
Thank you everyone for listening to the presentation. We will start taking questions now. Please type your question in the chat box. Please keep all your questions on the Everyone tab because we will not be checking the direct messaging. Otherwise, if you have any direct questions, you can do that afterwards through emails. We will be on mute for the next 20 -3 0 seconds till everyone types their questions in, and then we will start taking the questions. All right. We will start the questions. We will try to do it in order. There are so many questions repeated, so again, if we cover a topic, we will just skip it for the sake of time. First question is asking about drivers behind impairment reversal and cost of risk guidance for 2025 and 2026. Sujit?
The impairment reversal was mainly in the context of some accounts that were written off during previous reporting periods, and we managed over time to reach some work-outs with these related clients that led to collections or settlements during the second quarter. The second question is on the cost of risk guidance. The cost of risk for the first half is obviously benefited from the impairment provision reversals. As such, credit provision release of such a magnitude is generally not recurring, and we do not include its impact while projecting the normal cost of risk. In light of the global uncertainties, we are cautiously optimistic of the underlying cost of risk to remain within the 40 basis points range.
Next question is on the approach for calling our Tier 2s, and whether the plan is to refinance these instruments in the market similar to the AT1s. The rest of the question focuses on the targeted CET1 ratio once the earnings are capitalized.
Historically, NBK has taken investor-friendly stance when it comes to the calling options with respect to either Tier 1 or Tier 2. When the time comes to take such a decision, NBK will consider all relevant factors, including interest of investors, and take an appropriate decision regarding the calling mechanism. Now, there's another question on the CET1 ratio once you consider the net earnings. Of course, the CET1 ratio does improve with the retained earnings at the end of the year, and we would expect that the CET1 ratio and the total ratio at the end of the year would be more than the 150 basis points buffer we typically target for year-end ratios. From on the dividend payout point of view.
[inaudible]
You mean on the dividend policy?
Yes.
Well, we have the same dividend policy that has been for many years. We have consistently upheld a lucrative dividend policy while prudently managing our capital ratios. Our focus remains on effective capital planning to ensure our capital level are well aligned with our growth ambitions. That has been for the last few years, and will continue to do the same.
What does $ 60+ oil price mean for Kuwait liquidity, what is projected local deposit growth versus loan growth? I think that is one of the questions that we get regularly, especially with the expectation of a large infrastructure CapEx plans that the government has been talking about. We do believe that in the short term, the sensitivity to oil price, to some extent, will be less than neighboring GCC countries because of the lag in infrastructure spend over the years. The current projects in the pipeline are key projects to maintaining the basic infrastructure needs for the growth in population. We do expect that at least in the early stage, if there is a longer period of lower oil prices, at the early stage of that period, the spending and the projects will continue, with potentially some budget deficit.
Of course, if that lasts for several early years, definitely there will be some sort of a revision, to CapEx going forward. The impact on that or how does that affect local deposit growth and loan growth?
Amir, the NBK Group typically benefits because of its diverse geographic presence, and the oil price dependency is not so much for a wider group like NBK compared to smaller banks in Kuwait. We do not expect any specific impact, at least in the short term, on our loan growth expectations.
One question, again, is on loan growth. Where do you see loan growth slow down given HSD percent growth guidance, when you are already in that range?
The high single digit growth guidance takes into account not only the growth during the year but also the global uncertainty and possible slowdown in the international context. Although we have a very strong pipeline of loans, the timing of the drawdowns is uncertain and coupled with some expected repayments during the coming six months. At this stage, we are comfortable with a high single digit guidance. We will, of course, be open to revise the guidance as we see the next quarter unfolding.
What are the expectations for discount rates?
The discount rate expectations from the most recent discussions are two cuts of 25 basis points in the Fed rate. On the CBK front, it is more difficult to specify, but our working assumption is that it would be followed by a one 25 basis points rate cut in Kuwait.
A few questions from same house. Please comment on the strong loan growth year-to-date and drivers, and thoughts on how second half and full year 2026 are shaping up. How do reforms impact us? You answered part of that, so just briefly.
I will.
Yeah.
If only. On the drivers for growth for second half of 2025, in Kuwait, and at our overseas locations, corporate lending was the stronger of the drivers. With the consumer sector or consumer demand still muted in Kuwait, growth has more or less come from corporate demand. The good part is that this demand for corporate credit is not concentrated in one single location or a couple of locations. It has come all throughout the network, including the international locations, GCC locations, and also at Boubyan Bank. We expect this trend to continue into the coming quarters. And of course, any change in the projects landscape could be of benefit to the group.
Sequentially NIM was flattish Q-on-Q. Please quantify some of the drivers you made mention for the NIM compression year-to-date. What is the 42 basis point negative other drag? How do you see NIM in second half?
Okay. The NIM was kind of flat in the second quarter compared to the first quarter, predominantly because there was no change in the level of assets maintained with the Central Bank of Kuwait, earning virtually nothing. That, coupled with the impact of Egyptian pound devaluation, last year, the Egyptian pound net interest income was converted into Kuwaiti dinar at a higher rate compared to the current quarter or the current six months. And that also had an impact on the NIM.
Non-interest income a bit weak Q -on -Q. What caused the slowdown here?
Non-interest income, there is a bit of a seasonality because some of the income that is booked depends on the number of funds launched, for example, or specific credit-related events during the quarter. However, if you look at it holistically for the six months period, fee income has increased by 5.4%. We have a very strong increase in FX income. All of these are transaction driven and sustainable into the future.
OpEx growth, what was the benefit from the EGP devaluation? What is the constant currency OpEx growth?
Typically, we say that our cost growth is expected to be between 9%-10%, and that could be our underlying growth target during the current year as well.
Again, on the negative cost of risk, I think we covered that, and also on the recoveries and the guidance. The following point is, please comment on the status of the interim dividend, and if it has been suspended, explain why.
No, it has not been disturbed. We will continue with our dividend policy. As I mentioned, and my colleagues have mentioned also, we have a very big loan growth domestically and internationally. So we decided to retain interim earnings till the year-end, and focus on end-of-year final dividends distribution to be able to squeeze growth opportunities as they emerge during the year. That would be much beneficial for us.
Okay. Question on loan growth guidance and how the first half, 7.5%, would lead to stalling loan growth. I think we covered that as well.
Yeah
In previous question. Drivers of loan growth, how much is domestic versus foreign?
The loan growth at the group level was indeed more in international locations compared to Kuwait. But Kuwait also was a very strong contributor to this loan, through NBK and through Boubyan on the Islamic front. The international growth was across almost all locations, giving it the diversity that we are looking for.
Again, on NIMs. I think we've covered most of the stuff that relate to NIMs, but one specific question, is the Q2 NIM benefiting from the government bond issuance, or is that yet to be seen?
The government bond issuance started in the last week of June. Although the bank has its share of the government issuances, we have not yet seen the impact on the NIM or the net interest income for the half year. At the same time, there has been a drop in the Central Bank of Kuwait bond volumes with the bank. Overall, at a net level, we have not yet benefited from the government issuances.
Again, the following question is also on the same drivers of NIM that was covered. Question on loan growth, excluding Boubyan, was around KWD 1.2 billion.
We mentioned that.
Specifically on the sectors, are there specific sectors?
The loan growth came from diversified sectors and locations, not concentrated around one specific sector.
Can you give us an update on the mortgage law and potential implications for NBK?
Well, on the mortgage law, yes, there isn't really much to say except that there has been some recent confirmation from the Ministry of Finance suggesting that the draft is in its final stages. There are not much updates other than that. Discussions are still ongoing, but there hasn't been any progress in shaping those discussions. The government's reform momentum, supported by political stability, definitely is a positive sign to go forward with the mortgage law. I would say that we expect the mortgage law to be affected very soon.
Yeah, I think the impact on NBK is quite early to take a view on this. We have to see the draft law, the structure of the products, the pricing and everything before we can jump into the impact on the bank. Following question on capital again. CET1 is very close to minimum buffers. I think we covered most of this. Plan to increase CET1 ratio, that will probably be in the recapitalization. FY 2025 dividends could be lower than in 2024 levels. That's the question.
Yeah. Just a comment on the CET1 buffers. We typically employ these buffers at the year-end when we benefit from the retained profits for the year. With respect to the dividends, the dividend decision is taken at the end of the year, considering the growth requirement, and the ability to maintain our buffers. So it would be a bit too early to talk about dividends at this stage. A more firm view would be taken at the year-end by the board of directors.
Final question that we have, and it goes back to loan growth again. What has been driving the very strong loan growth over the recent quarters, especially given project awards has not really picked up pace?
If you look at the makeup of the loan growth, it has come across different locations that the group operates in. Also, a predominantly large component of this growth is from corporate-related loans. Corporate loans are always subject to the uncertainty with respect to the timing of the drawdowns. The bank has always enjoyed a very strong pipeline of approved credits, and it so happened that there were drawdowns during the last two quarters. Even in absence of any specific project-related drawdowns, because of the diversified structure of the group, we were able to benefit from a strong loan growth.
Okay. That was all the questions that we have. Thank you very much for joining us today. We hope we answered all your questions. If you have any further questions, please send them to our investor relations email and we will get back to you at our earliest. Thanks again. Elena, back to you.
I would like to thank NBK's management team for the presentation and for the very detailed Q&A. Also thank you to all the participants for joining the call today.
Thank you.
Thanks.
Thank you.