Oil and Gas

Kuwait's KFH eyes government projects in Saudi, plans new sukuk in 2022

KUWAIT, Aug 4 (Reuters) - Kuwait Finance House (KFH) , the Gulf nation’s biggest Islamic lender, plans to finance government projects in Saudi Arabia, including in the NEOM business zone, its acting chief executive officer told Reuters.

The lender is looking to contribute to the financing of Saudi government and infrastructure projects in sectors including electricity and oil, said Abdulwahab Al-Roshood.

“Saudi Arabia is a promising market ... KFH will have a share of financing these projects,” Roshood said on Wednesday.

Saudi Arabia, a neighbour of Kuwait, is working on several so-called mega projects expected to require large financing, including NEOM, a $500 billion flagship business zone aimed at diversifying the economy of the world’s largest oil exporter.

KFH, which sold $750 million in Additional Tier 1 sukuk in June, does not plan to raise more capital through sukuk this year, but intends to issue new Islamic bonds in 2022.

“Their dates depend on our financial needs and the need to support the capital through them ...and they may be the same size as the 2021 issue,” Roshood said.

KFH this week said net profit for the second quarter more than tripled due to a decrease in provisions and impairments.

Kuwaiti banks’ earnings slumped last year amid the coronavirus pandemic and weakness in oil prices, which hit Kuwait’s economy hard. (Reporting by Ahmed Hagagy Editing by Mark Potter)