KFH GROUP Company Profile

KFH GROUP Company Proﬁle KFH GROUP Company Proﬁle

CONTENTS

KFH Group Brief 05 Our Stakeholders 06 Our Standing 10 Our Financial Indicators 12 Our Services and Products 14 Our International Integrated Operations 16 Our Board 18 Our Management 19 Our Fatwa and Shari'a Supervisory Board 20 Our Accomplishments and Awards 22 Our Social Responsibility 23 Our History 24 KFH GROUP Company Proﬁle KFH GROUP Company Proﬁle

KFH Group Brief

Kuwait Finance House (KFH) is an award-winning pioneer in Shari’a compliant consumer banking services, wealth management services and corporate banking with operations in Kuwait, Bahrain,Turkey, Malaysia, Germany and the Kingdom of Saudi Arabia. KFH is one of the ﬁrst Islamic banks established around the world, opening its doors in 1978 , and today it ranks second largest Islamic bank globally in terms of total assets. In Kuwait, KFH is the second largest bank and the largest Islamic bank with total assets of KD 17.358 billion (USD 57.52 billion) as of end of 2017.

1st 2nd Shari’a-compliant Largest bank in bank in Kuwait Kuwait

2nd 1st 110 % Largest Shari’a compliant Shari’a compliant bank Increase in net proﬁts bank in the world by assets in Germany to shareholders (2012-2017) 23.46 % 11.45 % Growth in total 24.45 % Y-O-Y increase in customer deposits Growth in total assets 2017 net proﬁts to (2012-2017) (2012-2017) shareholders

Credit Rating Source: Rating Agencies Unit (2017)

Long Term Short Term Outlook Fitch A+ F1 Stable Moody's A1 P-1 Stable

Total Assets and Customer Deposits

Total Assets 24.45% Growth (2012 - 2017) Total Customer Deposits 23.46% Growth (2012 - 2017) in (USD billion)

2011 2016 2017 48.3 53.9 57.5

31.9 34.8 38.4

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Our Stakeholders

Listed on the Bursa Kuwait in 1984 , KFH ranked the second largest listed company in 2017 with a market capitalization of KD 3.3 billion (USD 11.0 billion). Major stakeholders include the Kuwait Investment Authority, Kuwait Awqaf Public Foundation, the Public Authority for Minors’ Affairs and the Public Institution for Social Security.

Major Stakeholders include:

Name Ownership Type Ownership Ratio Kuwait Investment Authority Direct 24.079% Public Authority for Minors’ Affairs (PAMA) Direct 10.484% Kuwait Awqaf Public Foundation Direct 7.296% Public Institution For Social Security (PIFSS) Indirect 6.19%

Stock Data

KSE ticker KFIN.KSE Market Cap (KD) (December 2017) 3,321,039,488 Market Cap (USD) (December 2017) 11,005,930,367

Earnings per share (USD Cents)

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KFH Global Ranking 1 Largest Islamic fnancier in Kuwait 1 Largest participation bank in Turkey 1 First Islamic bank in Germany KFH GROUP Company Proﬁle

Kuwait Finance House is committed to supporting the role of women and youth in the community. Our workforce under the age of 30 accounts for more than 31%.

Kuwait Finance House's under the age 30 workforce

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OUR STANDING KFH is Kuwait's second largest bank and largest Islamic bank in terms of assets. It is also the second largest Islamic bank in the world by total assets.

2nd Largest bank in Kuwait by assets

Kuwait Peers

National Bank Burgan of Kuwait Bank USD 86.3 bn USD 24.6 bn

Gulf Al Ahli Bank Bank of Kuwait USD 18.8 bn USD 14.5 bn

Commercial Bank of Kuwait USD 14.6 bn

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KFH Total Assets 2nd largest Islamic bank in the world by total assets USD 57.52 bn FY 2017

Global Peers

Al Rajhi Bank- Dubai Islamic KSA Bank - UAE USD 91.6 bn USD 56.5 bn

Qatar Islamic Bank - Abu Dhabi Islamic Qatar Bank - UAE USD 41.3 bn USD 33.6 bn

USD 30.54 bn Financing portfolio, making up 53.2% of total ﬁnancing held by Islamic banks in Kuwait in 2017.

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OUR FINANCIAL INDICATORS

KFH Performance Highlights (USD Billion)

2015 Total Assets: 54.3

Customer Deposits: 35.3

Total Revenue: 3.2

2016 Total Assets: 53.9

Customer Deposits: 34.8

Total Revenue: 3.1

2017 Total Assets: 57.5

Customer Deposits: 38.4

Total Revenue: 3.32

Net Proﬁt to Shareholders (USD Million)

26.3 % Growth (2015-2017)

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KFH Capital Adequacy

2017 Risk Weighted Assets USD 40.012 Billion

Capital Available USD 7.107 Billion

Capital Adequacy Ratio 17.76%

KFH Capital Adequacy 2016 Risk Weighted Assets USD 37.278 Billion

Capital Available USD 6.667 Billion

Capital Adequacy Ratio 17.88% KFH GROUP Company Proﬁle

OUR SERVICES AND PRODUCTS

Retail Banking

KFH offers retail banking services across a growing number of markets including Kuwait, Malaysia, Bahrain, Turkey and Germany through its subsidiaries: Kuwait Finance House, Kuwait Finance House – Malaysia, Kuwait Finance House – Bahrain, Kuveyt Türk Participation Bank and its subsidiaries in Germany, Kuveyt Türk Bank (KT Bank AG). In Kuwait, KFH ranks second largest bank with customer deposits totaling USD 38.4 Billion at the end of 2017, giving it a 19.1% market share in the local banking sector. Retail banking products are diverse and include savings, current and time-deposit accounts, personal fnancing solutions and long-term investment products. Customers can also invest for their future education, marriage or retirement needs through a number of KFH investment deposits and now have the option to lock their savings in gold, buying and selling through KFH retail banks. KFH continues to expand its reach and currently operates 61 branches in Kuwait and 395 in Turkey. In total, the KFH Group has 485 branches, over 1,479 ATMs and employs more than 15,000 people.

Corporate Banking

KFH is the partner of choice for companies looking for Shari’a-compliant fnancing instruments, corporate advisory and Shari’a-compliant syndication on their path to achieving business growth objectives. Kuwait Finance House- Bahrain was named the Best Corporate Account (Middle East) in 2013 by Islamic Business & Finance. KFH corporate banking products facilitate projects, trade, working capital and project fnancing for small, medium and large companies. As the second largest Islamic bank in the world in terms of assets, KFH occupies a prominent position in providing Shari’a-compliant products. Corporate banking services support import and export operations with KFH’s vast network and long-standing experience in the feld. These include: • Letters of credit at sight • Letters of credit on acceptance basis • Murabaha L/C • Export L/C • Letters of Guarantee

Financing

Targeting continued customer satisfaction, KFH offers a basket of fnancing services to meet its customers’ needs; from the procurement of construction materials to education. • Construction fnancing that includes technical guidance, recommendations and supervision. • Real estate fnancing allows customers to purchase housing units through Murabaha and pay in monthly installments. • KFH fnancial services are not restricted to properties in Kuwait; KFH also fnances its customers’ investment in international real estate with over 15 years payment schedule. • Customers may choose from myriad cars available at the KFH car showroom. To enhance its services further, KFH has also made its services available at third party car dealers. • KFH customers can receive fnancing for medical expenses and services in local hospitals. • Financing Education: Financing tools to cover university, school or specialized education fees. • Debt settlement solutions for internal or external debts.

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Investment

KFH investment services include strategic, medium and short-term investments. The total Assets approximated at the end of 2017 stood at KD 17.358 billion (USD 57.52 billion). The majority of investments are in Kuwait, with others in the GCC and the rest of the world. Investment sectors are diverse and including banking, investment, commercial, real estate, healthcare, asset management services and others. Real estate makes up the bulk of KFH investment portfolio given its long-standing and successful record in managing real estate investments both locally as well as internationally. KFH’s strategy targets all real estate sectors including industrial and logistic property with high occupancy rates while offering sustainable cash flow income streams and potential capital gains at exit.

Private Banking

KFH private banking offers new assets classes with higher and more lucrative returns to a group of customers who are becoming ever more discerning in their choice of where to invest. With a strong bank presence in markets of growing investor interest such as Turkey and Malaysia supported by extensive expertise in a number of key sectors, most notably real estate, KFH offers high-net-worth customers a choice from a number of portfolio management services or fnance and investment products. In 2009, KFH Investment subsidiary, KFH Capital Investment Company was awarded Best Islamic Asset Management Company, and in 2013, Kuwait Finance House – Bahrain was awarded Best Islamic Wealth Management Islamic Business & Finance Award and the Best Investment Advisory Services Banker Middle East.

Real Estate

Since the establishment of KFH, real estate services have maintained their position as a secured investment with lucrative returns. KFH has built more than 30 years of experience in the sector which has now expanded beyond Kuwait to the international market. In addition to offering banking and fnancing services, KFH is a leader in real estate fnance services. KFH owns, sells, services. Also, it owns, sells, leases, purchases and develops real estate and provides real estate fnancing and leasing options as well as property development, marketing, fnancing and management. With more than three decades of experience in Kuwait, KFH’s real estate services are unique while contributing to Kuwait’s construction boom and meeting the local market’s demand for affordable housing, investment and commercial real estate.

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OUR INTERNATIONAL INTEGRATED OPERATIONS

Turkey 395 Branches • Retail Banking • Personal Banking • Corporate Banking • Private Banking

Germany Kuwait 61 Branches 4 Branches • Retail & Private Banking • Retail Banking • Corporate Banking • Corporate Banking • Investment Services • Investment Services • Real Estate • Real Estate

Malaysia 14 Branches Bahrain • Retail Banking 10 Branches • Wealth Management • Retail Banking KSA • Corporate Banking • Corporate Banking • Commercial Banking • Real Estate 1 Branch • Private Banking • Asset Management • Wealth Management • Investment Banking • Investment Funds • Advisory and Custody

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KFH Group

485 15,000 Branches Employees 5.9 mn Customers 1,479+ ATMs 1st Shari’a-compliant bank in Germany KFH GROUP Company Proﬁle

OUR BOARD

KFH values its people and their contribution to its development. With a global staff of 15,000 employees, KFH is a leading global Islamic bank at the forefront of developing new and innovative products and services. KFH received several awards in recognition of its strong strategy and team work.

Mr. Hamad Abdul Mohsen Al-Marzouq Chairman since March 2014

Mr. Abdul Aziz Yacoub Al-Naﬁsi Mr. Barrak Ali Al-Sheatan Vice Chairman Board Member Mr. Fahad Ali Al-Ghanim Mr. Ra’ed Khaled Al-Kharaﬁ Board Member Board Member Mr. Muad Saud Al-Osaimi Mr. Salah Abdulaziz Al-Muraikhi Board Member Board Member Mr. Khaled Salem Al-Nisf Mr. Motlaq Mubarak Al-Sanei Board Member Board Member Mr. Noorur Rahman Abid Board Member

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OUR MANAGEMENT

Mr. Mazin Al-Nahedh Group Chief Executive Offcer

Mr. Shadi Zahran Mr. Abdullah Abu Al-Hous Group Chief Financial Offcer Group Chief Operations Offcer Mr. Fahad Al-Mukhaizeem Mr. Fadi Chalouhi Group Chief Strategy Offcer Group General Manager Retail Banking Mr. Waleed Mandani Mr. Ahmad Al-Sumait Group Chief Retail and Private Banking Offcer General Manager Treasury Kuwait Mr. Abdulwahab Al-Rushood Mr. Abdulla Al-Mejhem Group Chief Treasury Offcer General Manager Private Banking Mr. Frederick Carstens Mr. Khaled Alshamlan Group Chief Human Resources Offcer General Manager Corporate Banking Mr. Srood Sherif Mr. Wissam El-Kari Group Chief Information Offcer Group Chief Internal Auditor Mr. Khaled Al-Jumuah Group General Manager Legal Mr. Ahmed Al-Kharji "Our team is the Group Chief Corporate Banking Offcer key to our success" Mr. Gehad El-Bendary Group General Manager Risk Management

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OUR FATWA AND SHARI'A SUPERVISORY BOARD

Dr. Sayyid Mohammad Al-Sayyid Abdul Razzaq Al-Tabtaba’e Chairman

Dr. Mubarak Al-Harbi Dr. Esam Al-Ghareeb Board Member Board Member

Dr. Anwar Abdulsalam Dr. Khaled Al-Otaibi Board Member Board Member

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53.2% is KFH’s share of 2017 overall fnancing of Islamic banks in Kuwait KFH GROUP Company Proﬁle

OUR ACCOMPLISHMENTS AND AWARDS

As a pioneer in sharia’a compliant banking services in Kuwait, KFH is committed to best practices across the board, receiving several accolades for its services year after year. It has been recognized by international ﬁnancial magazines for its premium ﬁnancial services. Below are some awards granted to KFH. Evaluation has been conducted as per the award provider mechanism and standard.

Best Islamic Project Finance Provider Best Islamic Bank in the Best Islamic Bank in 2017 in the world Middle East 2017 Kuwait 2017 Global Finance emeaﬁnance emeaﬁnance

Best Islamic Bank in Best Islamic Bank in Kuwait 2017 Turkey 2017 Islamic Finance News Islamic Finance News

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OUR SOCIAL RESPONSIBILITY

Kuwait Finance House (KFH) has a long-standing commitment to support the communities it operates in across various platforms. As a leader in its community, KFH leads several social responsibility initiatives that directly affect the members of the community including sustainability, women and youth empowerment, health and environment. KFH also stands behind young entrepreneurs, helping them flourish and grow. At the group level, KFH implemented various programs through its corporate social responsibility (CSR) initiative, including assisting the underprivileged and natural disaster victims around the world.

Islamic Bank of the Year Islamic Bank of the Year Islamic Bank of the Year 2017 - Kuwait 2017 - Middle East 2017 - Global The Banker (FT) The Banker (FT) The Banker (FT) 2017 social responsibility activity highlights: January February March In-line with KFH mission to deliver superior Collaboration with Kuwait Red Crescent To promote education and creativity, we innovation, we supported over 40 creative Society to provide aid and relief for people partnered with MGRP as the Main Sponsor graduation projects for Kuwait University affected by conflict and natural disasters. for Little Entrepreneur Program. Engineering and Petroleum College students Exercised our role as a corporate citizen We partnered with Ministry of Interior as as well as being the Main Sponsor for the through active participation in the Kuwaiti the Main Sponsor of the Gulf Trafﬁc Week International Inventions Fair. National Days festive season with several to raise awareness of road regulations and ofﬁcial institutions and associations. safety procedures.

April May June Best Islamic Project Finance Provider Best Islamic Bank in the Best Islamic Bank in In cooperation with several universities Partnered with the Ministry of Youth as the Launched KFH Ramadan Campaign which 2017 in the world we organized lectures and seminars about first bank in Kuwait to support and sponsor includes various social activities & volunteer Middle East 2017 Kuwait 2017 Global Finance various topics in Islamic Banking. the “Kuwait Capital of Arab Youth” initiative work throughout the Holy Month as well as emeafinance emeafinance Partnered with several universities as the which started in May and continues for one the annual Iftar Meals distribution project Main Sponsor for their Career Fairs. year. across 3 governorates in Kuwait.

July August September Partnered with Coastal Guards Department Emphasizing on the importance of In partnership with AlSalam International to organize a campaign to raise awareness innovation we established a partnership Hospital, a KFH Group subsidiary, we and importance of regulations and safety with Kuwait Robots Club to support in re-launched the CPR and First Aid procedures for sea-goers during the summer creating the right environment to develop community training program certiﬁed by season. creativity among youth. the American Heart Society. Best Islamic Bank in Best Islamic Bank in Reiterated our belief in the talents of Kuwaiti Cooperated with the Ministry of youth by renewing our partnership with the Health by supporting their Haj and Eid Kuwait 2017 Turkey 2017 KFH “Mubadereen” team and continuing the Al-Adha Campaign to raise awareness Islamic Finance News Islamic Finance News December support for the champions to pursue their and importance of health and safety In cooperation with the United Nations High dreams and achieve glory. precautions. Commissioner for Refugees (UNHCR), KFH paid the amount of half a million US dollars October November from Zakat for aiding and relieving the Partnered with Ministry of Health and Organized a sports event for GUST students Rohinga Refugees crisis. AlSalam Hospital to organize an awareness to encourage and promote living a healthy On the occasion of FIFA uplifting the ban on campaign during Breast Cancer month. lifestyle. Kuwait Football Association and hosting of Participated in the Youth Empowerment Partnered with Dasman Diabetes Institute The Gulf Cup, we launched a campaign to Symposium “TAMKEEN” as a strategic to raise an awareness campaign on the support our Kuwait National Team through partner. occasion of the World Diabetes Day. several organized activities and events.

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OUR HISTORY 1977 2003 Kuwait Finance House was established by Amiri decree Al Enma’a House Real Estate Company - Bahrain is as Kuwait’s first Islamic bank. established and becomes one of the largest, privately- held real estate developers in Bahrain. 1978 2005 KFH received 170 account opening applications on its Kuwait Finance House (Malaysia) Berhad is first day of operations, August 31. established. It becomes the first Islamic bank to be granted a licence under the 1983 Islamic Banking Act (Malaysia). 1989 2007 Kuveyt Turk Participation Bank was established by a Kuwait Finance House – Hashemite Kingdom of Jordan Turkish cabinet decree. established as a subsidiary of KFH – Bahrain with a 28% holding in Al Durra Real Estate Development and Investment Company. KFH Real Estate Company KSA is established with a 1998 capital of SAR 2.5 billion. KFH Capital (KFH Capital Investment Company) is incorporated with a capital of KD 15 million (USD 49.72 million). 2009 Saudi Kuwaiti Finance House operations began. Kuveyt Turk Participation Bank expanded beyond Turkey starting with the UAE and Germany later in 2015. 2001 KFH Real Estate Company is established as KFH’s real estate arm to purchase and develop property. 2015

Kuveyt Turk Participation Bank opens in Germany. 2002 Kuwait Finance House - Bahrain operations began. The bank grew to become a leading provider of Islamic commercial and investment banking services.