KFH Holds AGM

Kuwait Finance House (KFH) held its annual general Assembly meeting (AGM) with a 79.849% quorum and approved the Board of Directors' recommendation of distributing cash dividends of 15% and bonus shares of 10% to shareholders.

Chairman's Message-Hamad Abdulmohsen Al-Marzouq

Chairman of Kuwait Finance House (KFH) Hamad Abdulmohsen Al-Marzouq said: "On behalf of myself, my fellow colleagues, and members of the Board of Directors of Kuwait Finance House (KFH), I would like to present to you the 2022 KFH Group Annual Report including major achievements, consolidated financial statements and other technical and administrative reports."

In the beginning, I would like to refer to KFH Extraordinary General Assembly resolutions in its meeting on Monday 25th July 2022 which included authorizations to the Board of Directors to execute the acquisition of Ahli United Bank - Bahrain.

We are pleased to assure our shareholders that the Board of Directors has, by the grace of Allah, executed all resolutions passed by the Ordinary and Extraordinary General Assembly meetings concerning KFH successful acquisition of 100% of AUB-Bahrain shares.

The year 2022 witnessed the conclusion of AUB-Bahrain acquisition deal, a successful and promising strategic project which has taken several years to finalize. The project represents a new pivotal era in KFH journey which is no less in its significance, opportunities, and challenges than KFH inception around 45 years ago. The acquisition has rendered KFH as the largest bank in Kuwait and the second largest Islamic bank worldwide. KFH market capitalization increased to more than KD 10 billion. KFH dominates more than 25% of the Premier Market weight which represents around 80% of Boursa Kuwait. If the past years can be named by the most significant achievements therein, then the year 2022 should be named the "Acquisition Year".

The acquisition was a well-studied optional challenge which KFH took on with remarkable ability and flexibility, thus overcoming several challenges. The date 6th October 2022 marked the beginning of trading on the new entity in both Kuwait and Bahrain stock exchanges, transfer of the acquired bank shares fully to KFH, increase of capital to KD 1,342,223,324.800 (One Billion, Three Hundred Forty-Two Million, Two Hundred Twenty-Three Thousand, Three Hundred Twenty-Four Dinars & Eight Hundred Fils) which was preceded by the endorsement of the shares exchange ratio at 2.695 of AUB shares against each KFH share. We have ensured during all stages that dealing with the acquisition project was made with transparency as KFH presented approximately 80 disclosures concerning the acquisition resolutions and steps. Also, we have organized 7 press conferences and interviews for the same purpose to make the project a success by the grace and blessings of Allah.

I would like to avail myself of this occasion to thank the shareholders for their trust and support, the regulatory authorities in Kuwait and Bahrain for endorsing the acquisition, local and global consultants, and the team which participated in the arrangement of the deal which was compatible with the interests of all parties, financial safety considerations and trademark value. Looking forward, I would like to emphasize that the success we have achieved is just another step on a road that demands further endeavor so that our shareholders would reap the benefits and we achieve our goals i.e., ensuring a diversified flow of income, entering new markets e.g., the UK and Egypt, utmost utilization of available advantages, expanding the scope of our competitive capabilities, maximizing our shareholders investments and achieving profit for our customers and depositors.

In the midst of economic challenges, KFH continued its initiative and leadership efforts which have characterized KFH business under a clear integrated strategy that focused on boosting the core banking activities to achieve sustainable profitability and growth. The strategy covered all other related requirements in the fields of digitalization, human resources, financing and investment products, social activities and humanitarian contributions while adhering fully to Sharia regulations which is KFH business methodology.

Our products have exhibited real economic value. KFH has made substantial progress in elevating innovation, digitalization, artificial intelligence, and business leadership, setting an example for Islamic banking of the future. Reforms continued at a larger pace to increase revenues, optimize costs, and maintain profit ratios through the implementation of the best responsible banking practices and risk management. The year-end financial indicators have affirmed the sound performance, balanced arrangement of priorities, creditworthiness, efficiency, and durability of conditions, thus enhancing KFH Group outstanding position and emphasizing its ability to encounter foreseeable uncertainty of global economy. KFH is still enjoying high liquidity, solvency, diversified financing portfolio and a remarkable provisions coverage. While we hope for the operating environment to improve, we are still optimistic about the continuity of valuable dividends as KFH dividends policy has always been stable.

By the grace of Allah, KFH has achieved a net profit distributable to shareholders reaching KD 357.7 million i.e., an increase by 47.0% compared to last year. Earnings per share reached 33.58 Fils i.e., an increase by 29.2% compared to last year.

KFH Group profits for the year 2022 included Q4 profits of AUB Group, effective as of the date of the share ownership on October 2 till the end of the year, reaching KD 62.5 million according to the international accounting standards applied in Kuwait. We look forward in 2023 to seeing full year profits of AUB Group included in KFH profits.

Net financing income increased to reach KD 800.5 million i.e., an increase by 36.7% compared to last year.

Total operating income increased to reach KD 1,072.3 million i.e., an increase by 32.2% compared to last year.

Net operating income increased to reach KD 723.3 million i.e., an increase by 43.8% compared to last year.

Total assets reached KD 37.0 billion, marking an increase of KD 15.2 billion or 69.7% compared to last year.

Depositors' accounts reached KD 22.5 billion, marking an increase by KD 6.6 billion or 41.7%. Capital adequacy ratio reached 17.66%, taking into consideration the recommended dividends.

The Board of Directors has recommended to the General Assembly distribution of 15% cash dividends and 10% bonus shares to shareholders, considering the distributed returns on investment deposits and saving accounts as shown in the following table:

Depositors Profit
Account Type	2022	2021
"Khumasiya" Investment Deposit	4.000%	1.700%
"Mustamera" Investment Deposit	3.500%	1.450%
"Sidra" Investment Deposit	2.325%	1.100%
Dima Investment Deposit (12 months)	2.725%	1.275%
Dima Investment Deposit (6 months)	2.225%	1.150%
Long term investment plans	2.550%	1.225%
Investment Saving Accounts	0.230%	0.200%

KFH succeeded in introducing a new generation of digital banking services as part of its comprehensive trend to digitalize all functions, services, products and means of providing such services, thus reinforcing our position to utilize and invent the best tools of financial technology. KFH has exclusively provided highly distinguished banking services at the banking sector level e.g., opening bank accounts online for non-KFH customers through interactive XTMs. IT sector has executed more than 33 systems, programs and automated services covering various aspects of business, developed IT infrastructure, cyber security buffers, accelerated regulatory reports issuance and introduced new solutions to enhance joint relationship with regulatory authorities.

Systems and programs have been provided for the new products in the field of cards, finance, operations, real estate valuation and Ijarah, in addition to the Digital Print project at branches, online cash transfer service, enhancement of Trade and e-payment SMS, banking cards issuance systems with 5 years validity and strengthening privacy protection policies.

Group Operations Sector achievements have enhanced digital transformation using robotic technology RPA, and artificial intelligence in the fields of clearance, cards, digitization of all paper files for trade finance, payment and documentary cycle on Easy Way system. The Digital Print project should ensure the transformation of all transactions to e-documents. Moreover, the transfer of Procurement Department to Operations will improve supply chains.

In corporate finance, KFH digitized transactions to facilitate transactions. KFH acted as the lead arranger of a KD 216 million syndicated finance deal in favor of Agility Company. Meanwhile, we continued to provide finance to small companies to enhance their role and support the national plan, as part of KFH's support to this segment. Also, we increased the number of corporate banking branches to 11 branches. Risk Department implemented an early warning program for credit risks at the Group level to mitigate costs and enhance profitability.

As part of its efforts to support innovation, technology and business leadership, the Digital Transformation Department has exerted significant efforts to establish business models among departments and with corporate customers and to spread technology culture among employees.

Group Treasury relentlessly expanded its investment and trading activities in Primary and Secondary Capital Markets. Treasury Dept. executed transactions worth more than USD 13 billion during 2022. Meanwhile, it continued to expand its trading of the short-term Sukuk of International Islamic Liquidity Management (IILM). KFH Group Treasury maintained its leadership position in IILM Market Making and won the top rank Primary Dealer for the 6th time and consecutive 2nd year in a row for Secondary Dealer from amongst several international and regional banks by IILM. Also, it expanded its exposure to green Sukuk and participated in Sukuk compatible with environment, social and corporate governance (ESG).

Group Treasury FX transactions exceeded USD 70 billion. Also, the department built a new partnership with a leading global bank to be its only Market Maker for GCC currencies. Furthermore, it introduced fully automated live FX prices for retail customers through ATMs. Also, it added the corporate FX platform "KFH Global" to improve transaction timing and provide live ratings for customers. Accordingly, several companies were brought onboard as customers of the Group.

The Group Financial Institutions Unit continued to develop its interbank facilities portfolio through its participation in financing two international syndicated facilities for two regional banks in the GCC region exceeding USD 2 billion in value.

KFH Capital, the investment arm of KFH Group, arranged the issuance of more than USD 6 billion Sukuk comprising sovereign and corporate Sukuk. Also, it acted as Lead Manager and Bookrunner for several issuances around the world.

On the employee engagement side, KFH Group continued to lead in the achievement of market leading engagement results compared to its peers and high performing organizations where we have achieved an engagement level of 83% on the Group Level. Capitalizing on the successful track record in this, KFH was the first bank /company in Kuwait to be awarded by "The Brandon Hall Group" who operates the largest and most prestigious awards program for Human Capital Management where KFH has competed with the top corporations on the global level.

As we review 2022 events and the achievements made, we proudly convey our sincere thanks and gratitude for the efforts exerted by KFH Group members and all departments and sectors, which have reflected positively on the best services provided to our customers and enhanced our shareholders and strategic partners' trust. We look forward to continuing our endeavor to achieve KFH, shareholders and customers aspirations.

Our vast banking experience enables us to maintain a long-term commitment towards our shareholders and enhance prosperity in the markets where we operate. We have witnessed remarkable improvement in the financial positions of subsidiaries despite the challenges and our need to encounter certain structural credit pressures resulting from the economic developments in their countries and regions. We anticipate continuing the achievement of long-term growth, benefiting from income increasing opportunities, improving efficiency and boosting our offers and services.

The values of initiative, compliance and quality will always remain as the main pillars of our social role and contribution to society. We believe that sound governance is reflected not only in achieving financial stability and complying with regulatory requirements but also in taking into consideration society development and environment sustainability. Accordingly, KFH introduced several environmental and sustainability initiatives and signed partnership agreements with government and private entities for the protection of environment as part of the (Keep it green) campaign.

KFH enjoys a track record of social responsibility as it made different social contributions inside and outside Kuwait e.g., signing a memorandum of understanding with Kuwait Municipality for the design and restructuring of the areas damaged in Mubarakiya market fire incident. Work includes the development of the market with estimated cost of KD 8 million. Social contributions also included the settlement of the debts of troubled debtors who have habeas corpus orders issued against them by court. Total debts amount exceeded KD 20 million benefiting around 10 thousand troubled debtors in cooperation with the Ministry of Justice.

KFH also provided support to the Kuwaiti Red Crescent Society in its social and aid initiatives where total value of contributions during 2022 approximated KD 4.5 million.

Along with its outstanding creditworthiness that has been affirmed by global credit rating agencies, KFH received during the year 23 valuable banking awards from global organizations specialized in the follow up and evaluation of top banks activities.

Meanwhile, we will continue to focus our efforts on enhancing our business model and achieving sustainable and joint added value for stakeholders. We focus on customers, innovation, digital banking, green finance, governance and social responsibility.

Finally, I would like to convey our sincere thanks, gratitude, and appreciation to His Highness the Amir of Kuwait Sheikh Nawaf Al-Ahmad Al-Jaber Al-Sabah, may Allah safeguard him, His Highness the Crown Prince Sheikh Meshal Al-Ahmad Al-Jaber Al-Sabah, may Allah safeguard him, and His Highness, the Prime Minister Sheikh Ahmad Nawaf Al-Ahmad Al-Sabah. Our thanks and appreciation are also extended to the Central Bank of Kuwait and regulatory authorities for their continuous support to the banking sector in the State of Kuwait.

May Allah grant us success

Acting Group Chief Executive Officer's

Message

Abdulwahab Iesa Al-Rushood

In the name of Allah, Most Gracious, Most Merciful

Praise be to Allah the Almighty, and Peace and Blessings be upon our Prophet Muhammad (PBUH),

his family and companions.

By the grace of Allah, Kuwait Finance House (KFH) demonstrated its robust organizational structure and successful business model during 2022. KFH improved performance efficiency, maximized solvency, developed and diversified the base of products, services and human talents. As well, KFH led competition and increased its market share, reflecting customers' confidence and constant leadership.

KFH continued its growth, taking into consideration the global and local economic developments, while following risk and strategy policies, governance standards as well as the Islamic Shari'a principles. The Bank has constantly focused on innovation, digitalization and banking technology to maintain its standing as the best bank for current and potential customers. KFH capped off its efforts with the successful completion of AUB-Bahrain acquisition deal, a major advance, and a strategic shift in KFH's business journey.

Financial indicators

KFH has achieved major growth in key financial indicators reflecting strong performance and financial robustness as well as the success of policies and plans that are being implemented. The indicators also reflect KFH's balanced performance and sustainable growth in all main budget items, with a clear increase in operating income, a reduction in expenses and rationalization of spending as well as a growth in the volume of assets, deposits, capital ratios and other items listed in the financial statements included in the 2022 Annual Report.

On another front, we emphasize the importance of maintaining a good dividend policy, as I have full confidence in KFH's solid financial position and the Group's ability to continue generating profits and rewarding its shareholders.

Strategy

During 2022, the Strategic Planning adopted innovative initiatives dealing with the principal pillars of KFH strategy. It followed with high efficiency the set targets and outlined a clear measurable and realistic plan which enabled it to follow up the strategic projects which the KFH Group aims to launch in the next few years. This created harmony within the Group and helped overcome obstacles for various administrative units. During the year, the Strategic Planning tasks were expanded to monitor the external environment and the successive changes as well as monitoring customer feedback and studying their banking experience in order to enrich their experience and strengthen their loyalty. We used in this pursuit effective tools of prognosis, planning, analytics and measurement, therefore enabling KFH Group to augment its market capitalisation to become the highest in the Kuwaiti market with the completion of the acquisition of Ahli United Bank (AUB).

The planning process was realistic and ambitious,and utilized effecientlt the Fintech on KFH diverse application programming interface (APIs) and our comprehensive data, through continuous follow up and specialized reports about the course of business under the economic developments and indicators of the banking industry locally and globally. The strategic plan takes into consideration security protection standards, enhances Cloud solutions and meets the goals of monetary and financial policies in the international environment and the countries in which KFH Group operates.

The Strategic Planning team carried out in 2022 close follow up of all Group activities and initiatives. It provided the BoD and the Executive Management with regular reports on the course of business, achievements, obstacles and means of overcoming them in coordination with various departments.

Risks

Thanks to our strong risk management framework at the Group level, our prudent risk approach, and the comprehensive governance framework that we implement and support effectively, we carefully manage credit risks in all businesses of the Group and its subsidiaries through a comprehensive and strong framework of supervision and governance. Also, we have a solid framework and tools to continuously identify external and internal threats and potential failures in people, processes and systems.

The Risk Management Department successfully implemented an early warning program for credit risks at the Group level, which contributed to improving the quality of assets and reducing bad debts and had a direct impact on mitigating the cost of credit risks and improving the Group profitability. This was implemented successfully and with integration between the Group subsidiaries in Kuwait, Turkiye and Malaysia, despite the economic and geopolitical changes. The Department also succeeded in implementing several experiments at the Group level to ensure business continuity under potential disaster scenarios.

Corporate finance

KFH maintained its vital role in corporate finance and business sector and increased its market share as well as strengthened its prestigious position in the corporate finance market where KFH runs credit portfolio of the highest-quality assets. KFH took a number of initiatives to solidify the relationship with customers, which had a positive impact on supporting the national economy and achieving KFH mission to create favourable investment environment. Also, KFH kept financing SMEs in appreciation of the important role they play in diversifying the national economy and creating job opportunities for young people.

KFH contributed to several financing deals, including acting as the lead arranger for a USD 216 million syndicated financing facility for Agility Public Warehousing Company to finance the acquisition of John Menzies Airport Services.

Banking services

Seeking to maintain its position in Kuwait, and to lead the Islamic banking sector by providing comprehensive package of products and services in the retail and private banking, KFH launched several major customer-focused campaigns, which achieved successes based on the customers assessment. In the face of renewed and intense competition, the high-quality assets of KFH witnessed strong and sustainable growth, while the bank successfully attracted high-net-worth Kuwaiti clients by significantly increasing its market share in personal finance since the beginning of this year.

As part of its endeavor to develop the branches network, KFH continued to invest in direct customer service initiatives, which included the renovation of branches in order to reflect the new and modern design of the Bank. The following four branches have been renovated in 2022: Bayan - Al-Khalidiya - Al-Jahra - Sabah Al-Salem, while work is underway to renovate four other branches: Salwa - Al-Qadisiyah - Sabah Al-Nasser - Fahaheel.

Innovative products

KFH launched several new innovative products and services and digital technologies with great success, including the staff rotation scheme designed to meet the needs of Kuwaiti and GCC customers in Turkiye, free airport service for Al Ruwad customers, raise over tenfold the number of withdrawals on Al Rabeh account, launch of the enhanced Baitak Rewards Program through travel catalogue, in addition to partnerships with major trademarks such as Qatar Airways, Alshaya Group, Privilege Club, Turkish Airlines, First Fuel Company, and others. Meanwhile, KFH successfully launched prepaid cards in five different currencies - US Dollar- UAE Dirham- Euro- Pound Sterling- Saudi Riyal, in addition to the KFH card for corporates as well as additional charge cards. Also, KFH launched many campaigns such as the "The Card is in Your Court with VISA" campaign, in addition to the service of cash deposit delivery for private banking customers.

With the aim of ensuring quality of service, KFH launched a new contact center infrastructure using Avaya Aura® Contact Center that improves and creates communication and collaborative interaction with customers, and directly enhances system stability and efficiency as well as productivity. Furthermore, new Digital Print service has been launched to end paper transactions in retail banking.

The shift of customers from the traditional channels of basic transactions and services to KFHonline app is evidence of their changing needs. All key services have been offered through the website, ATMs, KFHGo, and KFHonline app. We introduced a new service that enables non-KFH customers to open a bank account using the interactive XTMs.

Meanwhile, we worked on collecting direct feedback from customers at every touchpoint, with prompt follow-up and taking notice of their complaints or praise for the excellent service provided. In this regard, KFH launched the CX Hero Program to employees which aims to build a strong culture focusing on customer centralization, enhancement of customer satisfaction and inspiring employees to exceed customers' expectations. Also, an independent review is conducted by a third party to follow and assess the service level provided through all customer touchpoints with the Bank's channels. There has been a positive improvement over the years- by the grace of Allah- in service and behavior across all channels.

Digital transformation

As part of KFH's ongoing digital transformation journey, the Digital Transformation and Innovation Department struck many fruitful partnerships with Fintechs and SMEs that have generated value for internal stakeholders, external customers and regulatory bodies. Advancements have been made in sync with regulatory open banking initiatives. At the same time new products such as BNPL Service (Buy Now Pay Later) are being explored in an effort to maximize value for both our shareholders and customers. KFH and the team leading the digital transformation are keen on adapting and applying the latest technologies that not only maximize value for our stakeholders but also simplify and make day-to-day banking easier and more enjoyable.

We endeavored to promote a culture of innovation and continued process improvement internally which subsequently elevates our product and service delivery.

In line with our digital strategy, digital awareness campaigns and projects are ongoing and one of their fruits has been the Digital Academy. By providing the latest and best educational tools, knowledge, and frameworks easily accessibly on a large scale, KFH will be able to continue growing in the market.

Information Technology

The Information Technology Department implemented dozens of projects, services, systems and programs related to strengthening our approach towards digitization and the technicalization of all our services and products. In collaboration with the concerned departments, the department introduced a new FC Pre-Paid Card with Turkish Lira for frequent travelers to Turkiye, in addition to the current available 5 FCs Pre-Paid Cards. The new card gives a smart and convenient way to carry travel-spending money. Along with new supplementary charge card issuance within shared limits, the new systems witnessed successful update of card issuance systems to reach the validity of bank cards issued by the bank to a period of five years. K2K Money "Send" Service has also been issued through KFH Online to allow customers to send money using phone number through KNET links.

We successfully implemented the variable Ijarah product to serve individual finance, corporate and finance operations teams by providing a new mechanism that matches with the latest variable rates applied by the CBK to ensure proper profit recognition by KFH. Also, The Department automated three AML-intensive resources processes using RPA technology. The processes are Transaction Monitoring (TM), Blacklist Monitoring (BM), and Real-time SWIFT Filtering. In addition, the real estate valuation has been automated. This new solution was intended to serve KFH customers, non-KFH customers, banks, and financial institutions as well as the Bank's departments who have real-estate evaluation step as part of their business-as-usual processes.

As per CBK's requirements, KFH is currently able to identify KFH customers with special needs, the type of such needs, and the severity of these needs. This contributes to raising the level of dealing and satisfaction with the bank's customers.

As one of the important activities that ensure business continuity at KFH, the one-week integrated testing experiment of backing up the main systems of KFH on the backup operational environment (DR) has been successful. Following this experiment, the return to the actual operational environment has been completed successfully.

In collaboration with external partners, a card-on-file transaction for Kuwait Airways has been enabled to offer a new service to passengers where they can upgrade seats online through a third-party vendor without contacting the airline. Among other achievements: the automated merchandise return - VISA mandate, Zain Kiosk bill payments has been identified as ATM Transactions instead of being POS, apply necessary validations and controls to the corporate charity donation service to ensure compliance with recommended KFH security standards, to better serve our customers in the safest possible way and to 3D Secure OTP SMS text format enhancements, and merchandise refund SMS.

Moreover, we are implementing the leading project Digital Printing system in the branches. This CR is a major step towards digital banking and it will reduce the number of physical documents printed by the branch and transferring it to a digital copy.

We applied several improvements in the systems that led to the rapid extraction of Central Bank of Kuwait reports collected through KFH's system by enabling parallel operation, which has contributed to a reduction in time. Also, we added new reports in CBK reporting system to consolidate all the written off Retail personal finance transactions, Real-estate transactions and corporate transactions, therefore changing the behavior for outward cheques to limit the accepted account types, enhance the CBK check report to be sent to business, and automate the filling and the extraction of the Financial Disclosure Notes to save time and effort.

Also, we made enhancements on reporting expired Ijarah, XTM regulatory enhancements, adding XTM ID to transaction description in customer account statement in the following transaction types: cash/deposit withdrawals and buy gold, applying modifications for incoming telex messages MT103, MT202, MT199, MT299 to achieve higher system efficiency and speed of passage.

The department successfully added Maker-Checker control over card activation function on SSO-CMS, automated the suspicious transactions report, replaced Moody's Risk Analysis System with Risk Management with Credit Lens for the analysis and evaluation of the credit center of customers so that the data of the credit centers of KFH Group were collected and concentrated in one database with Kuwait as its center.

On the other hand, a large and important range of vital bank systems have been upgraded to keep up with the latest releases such as: Risk IBM Open Pages for suspected risk operations, credit card issuance system, HR system to work on the cloud, upgrade of network devices and information security devices, Super Cluster Database System, special systems for identifying users "Active Directory", provision of 250 new servers, and upgrade of the Domain Controllers and servers from 2012 to 2019 core.

Group Operations

Thanks to its regional and local position as a leading bank in adopting innovative technology that maximizes productivity, minimizes cost, and maintains the lowest risk ratios and most sound control measures, KFH Group Operations continues to focus on operational excellence as the engine facilitating all distinguished customer journeys for all KFH products and services.

In 2022, we launched and engaged in several transformation projects and focused on digitalizing some key back-office processes using RPA and A.I technologies in areas like customer clearance letter for our customers which was consuming long time and efforts and doesn't provide our customers with the expected experience.

There were several achievements in card operations toward enhanced customer experience and operational excellence achieved by Introducing non-stop processing (7 Days in a week) incoming and outgoing files related to settlement and reconciliation. We have enhanced the system and stopped issuing PIN mailers for all credit and prepaid cards, instead and in a unique customer experience, KFH customer can select his/her own preferred PIN through ATM's.

Moreover, Operations Department had also introduced further enhancements in several areas of finance operation where we digitalized all trade finance physical files. In the area of operational excellence, the Financing Product catalogue for all finance products has been created which will cultivate the staff knowledge on the product financing cycle and be used as an easy access for referral by any staff in the bank whenever required.

We also enhanced the customer experience in retail by disbursing the deals based on soft copy (scanned) instead of the previous exercise. That process resulted in a major increase of KFH market share and decreased the processing cycle to one day instead of three days and enhanced customer experience.

We implemented the documentary cycle on the Easy Way system in which the deal and the required documentation are moving parallel in the same workflow. This led to automating the disbursement process, provided more accuracy in the deals and resulted in a better customer experience. Also, we automated many workflows between the corporate banking and individual finance on the CRM workflow.

We also automated collecting the Brokerage fees of Tawarruq deals and added accounting packages with TWQ disbursement step to calculate and collect brokerage fees automatically by the system. On the other hand, we piloted the Digital Printing project which will transform all transactions performed by all related systems from physical paper workflow to e-documents through systems. Meanwhile, in order to enhance the experience of our corporate customers and ease the reach for them CSC (Corporate Service Center), Hubs concept has been expanded to additional 6 retail branches reaching a total of 11 branches providing dedicated service to corporate customers at all the governorates of Kuwait in order to enhance the customer journey and decrease the number of customers visiting CSC at the Head Office.

Treasury and Financial Institution

The Group Treasury took significant steps by foreseeing higher yield environment much earlier and proactively arranged cost effective liquidity and stable funding to Group businesses and optimized efficiently the excess liquidity between the returns for short- and long-term investment while maintaining funding diversification at an acceptable cost compared to the fluctuations in the rates of returns in the global markets.

The Group Treasury continued its investment and trading activities in primary and secondary capital markets. While being one of the most active market makers, Group Treasury executed Sukuk transactions worth more than USD 13 billion during the year and persistently expanded its short term Sukuk trading in International Islamic Liquidity Management Corporation's (the IILM) short term issuances. KFH Group Treasury maintained its leadership position in IILM market making and won the top rank Primary Dealer for the 6th time and consecutive 2nd year in a row for Secondary Dealer from amongst several international and regional banks by IILM. Also, Treasury expanded further green Sukuk exposure by participating in ESG- compliant Sukuk during the year.

The Group Treasury achieved USD 70 billion volume in FX transactions during the year and on boarded several new large and reputed corporate clients for dealing in FX Spot and Islamic derivatives hedging instruments and solutions and entered a new partnership with a leading global bank to be their sole market maker for GCC currencies. The Group Treasury's FX activities were further enhanced by providing the retail customers' live FX prices through ATMs where they can transact and obtain competitive and live FX market prices. Meanwhile "KFH Global", an FX platform for corporate FX which optimizes the speed of transactions with real time pricing, added more customers for its services.

The Group Financial Institutions (FI) department under Group Treasury continued to grow its portfolio of interbank facilities with further participation in the financing of two major international syndicated facilities totaling more than USD 2 billion, for two large regional banks in the GCC region. The FI department was also successful in raising competitive funding from several Asian banks with medium and long-term tenors which helped diversify KFH's funding base and work with regional and global banking partners.

In support of our corporate and private banking, FI also executed several bilateral agreements concerning Shari'a-compliant treasury and hedging solutions that will assist KFH with money management, liquidity, and mitigate fluctuations in benchmark rates and foreign currency positions for both KFH's customers and KFH Group.

Sukuk

In 2022, KFH Group continued its pioneering presence in the international Sukuk space. Through its sole investment arm, KFH Capital, the Group had successfully led and arranged Sukuk issuances exceeding USD 6 billion through diversified issuances covering sovereigns and institutions across various sectors and geographies during the year.

Leveraging on KFH Group's investor base and extensive network, KFH Capital has proved to be one of the companies in the debt placement field in the region. This was demonstrated when KFH capital arranged USD 3 billion sovereign Sukuk issuance for the Republic of Turkiye which was the largest governmental Sukuk issuance in Turkiye.

Additionally, KFH Capital demonstrated its key role by acting as JLM & Bookrunner for Islamic Development Bank's Sukuk (USD 1.6 billion), Dubai Islamic Bank's Sukuk (USD 750 million), First Abu Dhabi Bank's Sukuk (USD 500 million) and Boubyan Bank's Sukuk (USD 500 million), in addition to other international issuances.

KFH Capital also won ten reputable awards from various institutions for the deals concluded in 2021. The most prominent awards were Kuwait Deal of the year, 2021 - KFH's USD 750 million Sukuk, Hybrid Deal of the Year, 2021 - Saudi Aramco's USD 6 billion Hybrid Sukuk, Saudi Arabia Deal of the Year, 2021 - Saudi Aramco's USD 6 billion Hybrid Sukuk and Turkiye Deal of the Year 2021 - Kuveyt Turk USD350 million Tier 2 sustainability Sukuk.

KFH Capital demonstrated its Equity Capital Markets capabilities with notable transactions and its in-depth understanding of the Equity Capital Markets enabled it to succeed in the preparation, marketing, and execution of these transactions.

The Real Estate Investment management under KFH Capital also displayed good performance through multiple international real estate transactions, involving real estate funds of KFH clients. It successfully completed the sale of three properties in the UK: an office building in Liverpool, an industrial warehouse in Peterborough and a retail warehouse in Southampton.

Furthermore, KFH Capital continued to provide a robust and improved platform for its trading and brokerage clients to make things easier and help investors manage their portfolios as well as increase their market reach. Currently, online trading service covers Kuwait, Saudi, Dubai, Abu Dhabi, Qatar and US markets. The continuous improvement of its trading platform kept on attracting new clients and, by providing the best overall client experience, KFH Capital was able to grow its client base in 2022.

Shari'a Control

During 2022, KFH's Shari'a Control continued to perform its tasks and work to the fullest, as the Group's Internal Shari'a Audit Department carried out Shari'a audit work on KFH sectors and departments according to the approved plan for 2022. Also, the Shari'a Research and Advisory Department conducted Shari'a review on contracts, products, agreements and policies received from KFH sectors and departments, responded to Shari'a questions and inquiries and submitted what is required of them to the Fatwa and Shari'a Supervisory Board to obtain Shari'a opinion. In terms of spreading awareness and Shari'a culture among customers and employees, the Department answered Shari'a questions and inquiries received from customers and conducted and published economic jurisprudential bulletins through the e-channels available at KFH.

Human Resources

KFH continued its drive towards diversity and inclusiveness. Our programs and employment intakes continue to have a focus on further diversity where ladies make up 20% of our new recruits during this year.

In line with the continued drive on the Kuwaitization fronts, KFH has successfully increased the number of Kuwaitis within middle management to 64%. KFH has also injected more Kuwaiti leaders within the executive leadership level thanks to the robust and deep pipeline KFH has. As part of KFH role toward providing attractive and differentiated employment opportunities to our Kuwaiti Youth Talent, we have recruited 390 Kuwaitis during this year.

As part of our continued focus on the development of our current and future leaders, we have executed a series of programs for our talent with the most prestigious educational entities such as Headspring, INSEAD, and others. These programs have been tailored to equip our leaders with all the up to date thinking on leadership and driving towards results. The programs have been received very well by our current and future leaders.

With 2022 behind us, the Group's Human Resources has worked on ensuring that KFH colleagues continue being retained as part of this industry leading organization through a differentiated approach in putting together our Employee Value Proposition whereby the Grace of Allah, this will allow us to continue attracting and developing our talent.

Sustainability & Social Responsibility

At KFH, we recognize our role as an integral part of the community. This inspires us to interact with all stakeholders by fulfilling our social duty through collaboration and coordination with institutions and governmental bodies working effectively in the societal and sustainability initiatives in line with the State's development project.

KFH participated in supporting the 3rd Kuwaiti Relief and Medical Campaign in Jordan through a team of Kuwaiti doctors and consultants. The campaign was organized by Kuwait Red Crescent Society in coordination with Jordan National Red Crescent Society. With the support of KFH, Kuwait Red Crescent Society signed an agreement with the Turkish Red Crescent Society to execute different relief and social projects to aid people affected by natural disasters in Turkiye. The total value of contributions during 2022 reached about KD 4.5 million.

Further, KFH participated, in coordination with Kuwait Red Crescent Society in a field visit to aid Rohingya refugees in Bangladesh. The visit was part of the memorandum of understanding signed with the United Nations High Commissioner for Refugees (UNHCR), Kuwait Office.

KFH also signed a memorandum of understanding with Kuwait Municipality for the design and reconstruction of damaged areas of Al Mubarakiya market, as part of KFH's leading role in the community and considering the historical value, cultural significance, and reputable heritage which the market enjoys. The memorandum also included the reconstruction of 17 buildings at an estimated cost of around KD 8 million.

In collaboration with the Ministry of Justice, KFH executed an initiative to cover the payments on behalf of people with defaulted debts, against whom the court issued arrest warrants. The amount paid exceeded KD20 million, benefitting nearly 10,000 debtors.

KFH also signed a strategic partnership with Kuwait Society for the Handicapped (KSH), the first of its kind in the banking sector, to train a group of people with special needs, empower and engage them into society.

On the sustainability front, KFH launched various initiatives under (Keep it Green) campaign affirming its keenness towards projects that focus on sustainability and the preservation of the environment. At the forefront of its green initiatives is launching the first environmentally friendly cards, which are 85.5% made of recycled plastic. KFH also signed memoranda of cooperation with private and government entities to support the plantation and greening projects as well as mitigating carbon emissions.

We will continue channeling our efforts to increase investment in Green Sukuk from the total Financing Portfolio, especially in projects related to reducing carbon footprint and climate change risks. We also provide financing and technical stimuluses for projects that focus on environmental aspects and the reduction of carbon emissions.

KFH also owns KFH-Auto showroom, an environmentally friendly building that meets green building and global sustainability standards. It is the largest auto showroom in the Middle East with a total area of 38,000 sqm. KFH received the Global Sustainability Assessment System GSAS - Gold Level Certificate for KFH Auto building which is granted to projects compliant with strict environment sustainability standards.

We also released the sustainability report as part of KFH Group's integrated sustainability strategy. The report covered environment, society, and governance in KFH activities, management, and operations.

During this year, KFH scooped 23 prestigious awards from well-known international and regional providers concerned with monitoring the performance of world-leading banks. The awards were in recognition of KFH's achievements and significant transformation in various fields, in addition to its developed products, services, digital plans, leading position, reliability, community and humanitarian initiatives, as well as creditworthiness endorsed by the reports and certificates of international rating agencies.

Finally, I would like to emphasize that we will increase our investment in, and support to human capabilities, developing softwares, system integration projects and after-sale and support services. The employee will be the main element of these projects and the key driver for the success, development and upgrade of KFH.

We will focus on the organizational structure - management standing - service quality - customer attraction - integration of the Group's departments and other parties - interdepartmental synergy - general strategy.

We will also continue our efforts ensuring that KFH always remains in a new and good position to benefit from enhancing efficiency, increased customers, service excellence and future growth opportunities fostered by a culture of transparency, responsibility and cooperation. We will also maintain our commitment to building a better society for groups, companies and individuals, affirming our continuous endeavor to provide added value in financial, environmental and social aspects for the interest of our customers, shareholders, employees and communities.

In conclusion, I would like to convey our sincere thanks, gratitude, and appreciation to His Highness the Amir of Kuwait Sheikh Nawaf Al-Ahmad Al-Jaber Al-Sabah, His Highness the Crown Prince Sheikh Meshal Al-Ahmad Al-Jaber Al-Sabah, may Allah safeguard them, and to His Highness, the Prime Minister Sheikh Ahmad Nawaf Al-Ahmad Al-Sabah. Our thanks and appreciation are also extended to the Central Bank of Kuwait and all the regulatory authorities for their constant support to the banking sector in the State of Kuwait.

May Allah grant us success.

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