KINGDOM Financial Holdings, which will next month be celebrating 10 years of existence, this week produced a set of results showing the group posted a $21 billion profit for its operations during the first six months of t
Kingdom said that net income interest contributed 67% to group income compared to 83% in the comparative year.
“While margins were affected by the high cost of funding during the banking crisis, we were able to trade our portfolios successfully, thereby increasing interest-related revenues,” Kingdom said.
“With the increases in retail deposits and a reduction in the costs of funding following the capitalisation, higher yielding assets were purchased, which we traded assertively thereby improving the net interest return. The group, which prides itself on its astute treasury management skills, will continue to explore arbitrage opportunities and reposition its portfolios for best advantage.”
Kingdom said that some of the policies introduced by the central bank such as the hiking of accommodation rates from 95-105% annually to between 160-170% and then to between 180-190% for secured and unsecured lending respectively in July had helped rid the sector of speculative activities.
“Although these measures have the capacity to curb speculative activities and hence inflation, the monetary authorities should guard against temporary lapses in the maintenance of positive rates,” Kingdom said.
“The erosion of real rates during the end of June and July due to a softening of interest and rising inflation re-ignited a speculative bull-run on the equity market.”
Kingdom said against this background, the central bank should be applauded for maintaining short positions on the money market as a means of ensuring firm interest. rates to curb inflation.