Burgan Bank · KSE:BURG
Burgan Bank — FY2022 Earnings Presentation
22 slides from Burgan Bank's earnings presentation, Feb 14, 2023
Slide 1: Burgan Bank Group Investor Presentation FY 2022 Financial Results
BURGAN BANK GROUP INVESTOR PRESENTATION FY 2022 FINANCIAL RESULTS 14TH FEBRUARY 2023
Slide 2: Table of Contents
TABLE OF CONTENTS Contents Page At a Glance 4 Group Overview and Operating Strategy 5-6 Business Update 8-9 Financial Review - Key P&L Metrics 11 - 12 Financial Review - Asset Quality 13 Financial Review - Key Balance Sheet Metrics & Liquidity 14 - 15 Financial Review – Capital Levels 16 FY’22 Perfo
Slide 3: At a Glance, Group Overview and Operating Strategy
At a Glance, Group Overview and Operating Strategy
Slide 4: Burgan at a Glance
BURGAN AT A GLANCE About Us Credit Ratings Rating(1) ▪ Established in 1977 as Joint Stock Company by the Government of Kuwait and privatized in 1997. A (Outlook: Stable) ▪ Listed on Boursa Kuwait in 1984 and grew to be one of the leading conventional banks in Kuwait (in terms of total assets)(1), wi
Slide 5: Kuwait Focused Bank with Regional Diversification
KUWAIT FOCUSED BANK WITH REGIONAL DIVERSIFICATION Domestic Market % of Group Franchises Ownership Business Model Position(1) Assets(1),(3) Burgan Bank Kuwait Corporate banking is the key One of the top three N/A conventional Banks(2) business; Retail Banking 71% growth is a focus area Burgan Bank Co
Slide 6: Burgan's Long-Term Strategic Priorities
BURGAN’S LONG-TERM STRATEGIC PRIORITIES A. Strengthen Kuwait B. Strategic Asset C. Digital Business Reallocation Transformation Revitalize key businesses Sale of non-core assets Delivering Superior in Kuwait such as Retail Customer Experience Pursue Cautious Growth in banking subsidiaries
Slide 7: Business Update
Business Update =H ul Lo OL... 9 js Sms ‘79 BURGAN BANK
Slide 8: Key Business Updates
KEY BUSINESS UPDATES ➢ Retail business in Kuwait has had a strong 2022 ➢ Client acquisitions are up, asset & liability product sales are growing “Retail Transformation” in ➢ Produced solid growth in Top line & Bottom line 1 Kuwait yielding results ➢ Key Impacts: ✓ Kuwait Retail banking Revenues: 25%
Slide 9: Performance Highlights
PERFORMANCE HIGHLIGHTS FY’22 Q4’22 Improved Margins (1) 2.4% 2.8% +30bps y-o-y(4) +50bps y-o-y(5) Reduced 0.6% 1.1% Credit Costs(2) (-)130bps y-o-y(4) (-)220bps(5) Healthy Bottomline(3) KD 52mn KD 11mn +15% y-o-y(4) +113% y-o-y(5) • Dividend payout(6),(7) : 61% (43% in FY’21) Growth in Dividends • P
Slide 10: Financial Review
Financial Review =H ul Lo OL... 9 js Sms ‘79 BURGAN BANK
Slide 11: Profitability Driven by Higher Margins
PROFITABILITY DRIVEN BY HIGHER MARGINS Revenue | KD mn Operating Profit | KD mn Net Income(1) | KD mn 235 232 213 90 122 104 140 125 116 52 49 45 58 76 34 125 144 122 81 97 67 FY'20 FY'21 FY'22 FY'20 FY'21 FY'22 FY'20 FY'21 FY'22 Kuwait International^ Consol. Adj & Others Kuwait International^ Conso
Slide 12: Net Income Evolution – FY'22 vs FY'21
NET INCOME EVOLUTION – FY’22 VS FY’21 Net Income Evolution – FY’22 vs FY’21 | KD mn (13) 77 (25) +59 +19 (22) 52 45 52 45 77 (12) Net Income - Increase in Net Reduction in Increase in Steep fall in Others^ Net Income - IAS 29 Impact Net Income - FY'21* Interest Income Non Interest Operating Credit C
Slide 13: Stable Asset Quality
STABLE ASSET QUALITY Non-Performing Loans (NPLs) | KD mn NPL Ratio | % 4.2% 201 2.6% 1.7% 1.9% 101 81 88 1.4% 36 100 53 52 0.7% 27 FY'20 FY'21 FY'22 FY'20 FY'21 FY'22 Kuwait International^ BB Kuwait - NPL Ratio BB Group - NPL Ratio^ Provision Charge(1) | KD mn Provisions Coverage Ratio(2) | % 532.9%
Slide 14: Assets & Loans
ASSETS & LOANS Total Assets(1) | KD mn Customer Loan(1) & Sector Concentration | KD mn 7,106 7,075 7,166 244 342 300 4,228 1,839 1,741 1,867 2% 10% 5% 1,034 9% 37% 5,569 5,548 5,463 12% 3,207 24% FY'20 FY'21 FY'22 FY'22 Personal Real estate Manufacturing Commerce Construction Oil & Gas Kuwait Intern
Slide 15: Access to Liquidity Remains Strong
ACCESS TO LIQUIDITY REMAINS STRONG Customer Deposits(1) | KD mn Deposits by Type – FY’22 | % 4,091 4,162 3,932 3% 1,113 1,149 1,241 36% 61% 2,979 3,012 2,691 CASA Time Other FY'20 FY'21 FY'22 Kuwait International Loan to Deposit Ratio (LDR) | % Regulatory Liquidity Metrics(2) | % 207.7% 100% 95% 151
Slide 16: Optimal Capital Levels
OPTIMAL CAPITAL LEVELS Regulatory Capital | KD mn, % 18.1% 2,500 17.5% 16.8% 16.0% 12.5% 2,000 11.5% 11.0% 11.4% 10.8% 10.5% 9.0% 1,500 8.0% 6.0% 1,143 1,092 1,084 1,000 329 228 232 1.0% 153 155 153 500 -4.0% 661 711 697 - -9.0% FY'20 FY'21 FY'22 6,306 6,251 6,434 CET1 AT1 Tier II CET 1 Ratio CAR Ra
Slide 17: Improving Performance Across International Operations
IMPROVING PERFORMANCE ACROSS INTERNATIONAL OPERATIONS CONTRIBUTION (1) GROWTH(2) KPIS(3) ASSETS REVENUES NET INCOME(5) LOANS NIM ∆% CI RATIO ∆% COC ∆% NPL RATIO ∆% (19.3 (4.2 (250 Turkey pps) pps) bps) 13% +72% +472% (-)3% 4.3% +160 bps 35.0% -0.2% 4.2% ASSETS REVENUES NET INCOME LOANS NIM ∆% CI RAT
Slide 18: Q4'22 Earnings Update
Q4’22 EARNINGS UPDATE Revenue | KD mn Operating Profit | KD mn Net Income(1) | KD mn 68 66 48 20 43 40 34 11 23 20 11 12 24 5 46 36 32 31 23 1 17 Q4'20 Q4'21 Q4'22 Q4'20 Q4'21 Q4'22 Q4'20 Q4'21 Q4'22 Kuwait International Consol. Adj & Others Kuwait International Consol. Adj & Others Net Interest Mar
Slide 19: Summary
Summary
Slide 20: Summary
SUMMARY Burgan has made significant progress in key strategic initiatives in FY’22: ❖ Sale of Bank of Baghdad ❖ Risk mitigation measures’ implementation in Turkey ❖ Retail banking business transformation in Kuwait We expect the following trends to continue: ❖ Margins to stabilize ❖ Credit costs
Slide 21: Thank You
Thank You =H ul Lo OL... 9 js Sms ‘79 BURGAN BANK
Slide 22: 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