Burgan Bank · KSE:BURG

Burgan Bank — FY2019 Earnings Presentation

14 slides from Burgan Bank's earnings presentation, Mar 11, 2020

  1. Slide 1: Burgan Bank Group Investor Presentation FY 2019 Financial Results

    BURGAN BANK GROUP INVESTOR PRESENTATION FY 2019 FINANCIAL RESULTS 11TH MARCH 2020

  2. Slide 2: Table of Contents

    TABLE OF CONTENTS Contents Page FY2019 Key Achievements 4 Key P&L Metrics 5 Asset Quality 7 Key Balance Sheet Metrics 8 Capital & Liquidity 9 FY’19 Performance by Entities 10 Sale of BoB: Rationale & Impacts 11 Summary 12 2

  3. Slide 3: Change in Financial Statements' Closing Process

    CHANGE IN FINANCIAL STATEMENTS’ CLOSING PROCESS  Beginning this year, the Bank has revised its financial statements’ closing process by changing the reporting date of its subsidiaries to one month earlier than the Group’s reporting date.  Accordingly, Burgan’s reported financial results of FY 2019

  4. Slide 4: FY2019 Key Achievements

    FY2019 KEY ACHIEVEMENTS High Shareholder Returns - Net Income:- KD 84.7mn (+3% vs ’18) - Return on Equity:- 10% - Cash Dividend (Recommended):- 12 fils per share Improved Asset Quality - NPL Ratio:- Kuwait: 1.6% (1.6% in ‘18); Group: 2.5% (2.7% in ‘18) - Cost of Credit:- Kuwait: 0.5% (1.1% in ‘18);

  5. Slide 5: Robust Revenue Base with Improved Efficiencies

    ROBUST REVENUE BASE WITH IMPROVED EFFICIENCIES… Revenue & Margins(1) | KD mn, % Operating Profit & Cost to Income Ratio(2) | KD mn, % 2.9% 2.7% 2.6% 45.6% 2.3% 42.1% 41.2% 2.1% 2.1% 265 248 239 9 31.1% 32.3% 11 27.6% 16 104 92 146 90 154 130 3 5 62 53 42 165 176 147 128 101 110 (0) FY'17 FY'18 FY'19

  6. Slide 6: And Lower Credit Costs Leading to Higher Net Income

    … AND LOWER CREDIT COSTS LEADING TO HIGHER NET INCOME Cost of Credit(1) | KD mn, % Net Income(2) & Returns(3) | KD mn, % 1.4% 1.1% 1.0% 10.7% 9.8% 0.9% 1.1% 8.3% 0.5% 85 83 11 1 62 65 2 2 24 49 19 42 1 27 107 14 33 61 73 28 34 15 (0) (0) FY'17 FY'18 FY'19 FY'17 FY'18 FY'19 Group Expenses and Consol.

  7. Slide 7: Continuing to Maintain Strong Asset Quality

    CONTINUING TO MAINTAIN STRONG ASSET QUALITY NPL Ratio (%) NPLs (KD mn) & Coverage (%) 339.1% 330.7% 285.4% 167.5% 199.8% 154.8% 2.7% 2.7% 2.5% 133 128 119 1.8% 38 32 1.6% 1.6% 59 33 39 63 57 60 FY'17 FY'18 FY'19 FY'17 FY'18 FY'19 Kuwait International (ex BoB) Group NPL Ratio Kuwait NPL Ratio BoB Gro

  8. Slide 8: Growth Led by Kuwait

    GROWTH LED BY KUWAIT Customer Loans (KD mn) & Sector Concentration (%) Customer Deposits (KD mn) & Deposits by Type (%) 4,408 42 4,263 4,284 4,154 33 191 3,991 3,768 1,225 198 1,580 1,391 1,325 1,141 1,183 4% 18% 2% 6% 25% 29% 3,059 11% 2,786 2,839 2,638 2,850 2,387 67% 4% 11% 23% FY'17 FY'18 FY'19

  9. Slide 9: Optimal Capital Levels with High Liquidity

    OPTIMAL CAPITAL LEVELS WITH HIGH LIQUIDITY Regulatory Capital (KD mn) Regulatory Liquidity Metrics (%) 175.5% 175.5% 2,500 20.0% 17.4% 16.8% 18.0% 16.2% 149.2% 2,000 16.0% 14.0% 14.0% 11.9% 11.5% 1,500 10.9% 12.0% 113.4% 112.3% 10.5% 100% 10.0% 1,001 1,033 1,000 924 8.0% 170 175 154 146 153 6.0% 145

  10. Slide 10: Stable Consistent Trends in KPIs Across Group

    STABLE CONSISTENT TRENDS IN KPIS ACROSS GROUP CONTRIBUTION(1), (2) GROWTH(3) KPI’S(4),(5),(6) ASSETS REVENUES NET INCOME LOANS NIM ∆% CI RATIO ∆% COC ∆% NPL RATIO ∆% Kuwait (21 (472 (64 74% 60% 80% +8% 2.1% bps) 27.6% bps) 0.5% bps) 1.6% ASSETS REVENUES NET INCOME LOANS NIM ∆% CI RATIO ∆% COC ∆% NPL

  11. Slide 11: Sale of BoB: Key Rationale & Impact

    SALE OF BOB : KEY RATIONALE & IMPACT Rationale for Sale  Focus on core Businesses  Tough operating environment in Iraq  Improved asset quality;  Simpler structure; Enables capital to be deployed to core markets Onetime loss due to accounting Expected Gain in FY’20 upon completion reclassificatio

  12. Slide 12: Summary

    SUMMARY  Burgan delivered strong performance in FY’19, generating double-digit shareholders returns  Burgan’s strong risk management framework ensures consistently improving asset quality & lower credit costs  Looking ahead, Burgan is prioritizing execution of its Digital Strategy to better serve

  13. Slide 13: Thank You

    Thank You =H ul Lo OL... 9 js Sms ‘79 BURGAN BANK

  14. Slide 14: Disclaimers

    DISCLAIMERS IMPORTANT NOTICE This presentation has been prepared by Burgan Bank K.P.S.C. and is subject to the applicable laws and regulations in the State of Kuwait. It is for information purposes only and it shall not be reproduced or redistributed to any other person without obtaining Burgan Bank

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