Burgan Bank · KSE:BURG
Burgan Bank — Q2 2013 Earnings Presentation
29 slides from Burgan Bank's earnings presentation, 2013
Slide 1: Investor Presentation 2nd Quarter 2013 Financial Performance
INVESTOR PRESENTATION 2nd Quarter 2013 | Financial Performance 1
Slide 2: Agenda
Agenda Economic Overview Results Overview Performance Trends: 2nd Quarter 2013 Key Developments Appendix: Financial & Other Achievements 2
Slide 3: Economic Overview
BURGAN BANK >] ol sp =a Economic Overview Burgan Bank Group: Kuwait - Jordan - Turkey - Algeria - Iraq - Tunisia - Lebanon
Slide 4: Lower growth prospects, slower MENAT growth expected
No major changes… with low growth ahead, debt and unemployment remaining high…. Global Macro: As expected, weak fundamentals with stabilization sustained by policy hence the risk of excessive liquidity creating new bubbles but not helping growth… Advanced - Real GDP growth (%) Developing - Real GDP
Slide 5: Results Overview
F) sy = ’7e@ BURGAN BANK Results Overview Burgan Bank Group: Kuwait - Jordan - Turkey - Algeria - Iraq - Tunisia - Lebanon
Slide 6: 2nd Quarter 2013: Key Highlights
2nd Quarter 2013: Key Highlights Q2’12 Q2’13 STRONG GROWTH IN REVENUE SUPPORTED BY IMPROVED NET INTEREST INCOME AND NON INTEREST Revenue 12.8% 47.5%|29.5%(1) Solid Business INCOME RESULTS Performance NIMS ADVANCED DESPITE LOW INTEREST RATES with access & ENVIRONMENTS NIM % 2.6% 2.91%|2.93%(1) ex
Slide 7: Performance Trends – 2nd Quarter 2013
Performance Trends – 2nd Quarter 2013 7
Slide 8: Strong Financial and Operating Performance
Strong Financial and Operating Performance… Revenue | KD million(1) Cost of Credit | KD million(1) 2,697 2,894 3,498 3,484 3,536 17.4 71.0 ∆ 47.5%| 29.5%(2) 8.7 13.7 56.0 8.9 11.5 51.2 62.3 8.5 48.2 7.9 10.8 7.3 2.5 48.1 4.0 48.1 5.0 6.4 5.9 4.5 2.9 2.3 Q2'12 Q3'12 Q4'12 Q1'13 Q2'13 Q2'12 Q3'12 Q4'1
Slide 9: ...with improved Net Interest Income
…with improved Net Interest Income Net Interest 2.6% 2.4% 2.9% (2) Margins(1) 2.6% 2.6% 2.5% 2.6% 2.2% 118.9 43.0 104.6 30.2 23.5 Net Interest Income | KDmn 30.8 26.8 Q2 29.9 Q2 28.7 35.0 29.9 30.8 30.2 25.6 Q1 28.0 Q1 FY 11 FY 12 Q2'12 Q3'12 Q4'12 Q1'13 Q2'13 (1) FY NIMs figures calculated based on
Slide 10: ...and Non-Interest Income
…and Non-Interest Income Non-Interest 37.8% 39.4% 36.0% 35.9% 36.1% 37.4% Income(1) to 35.3% Revenues 66.6 27.9 6.7 58.8 3.8 2.0 5.1 2.2 Non-Interest Income | KDmn(1) 2.6 21.0 6.2 1.6 1.6 17.6 2.7 18.2 17.4 7.8 1.4 16.5 0.9 0.7 0.9 2.5 1.3 8.0 1.9 0.7 0.2 0.1 0.1 6.3 4.6 4.3 4.8 38.1 38.1 11.9 9.5 9
Slide 11: Strengthen/Diversify Balance Sheet
Strengthen/Diversify Balance Sheet 39.7% 86.9% International Loans to 84.8% Contribution 28.0% 39.3% 39.1% Deposits 81.9% 27.1% 83.6% 83.1% 4,101 3,968 3,384 3,406 3,895 3,366 3,330 2,783 3,164 1,694 41.3% Customer Deposits | KDmn Customer Loans | KDmn 1,331 1,351 1,670 2,592 1,318 1,677 755 1,119 3
Slide 12: ...and effectively managed risk position
…and effectively managed risk position Non Performing Assets (KD million) and Coverage Ratio 246% 226% 226% 120% 131% 110% 73% 73% 53% 55% 349 341 267 277 194 202 206 226 184 188 153 143 86 90 92 Q2'12 Q3'12 Q4'12 Q1'13 Q2'13 NPA NPA net of collateral Total provisions Coverage net of collateral Cove
Slide 13: ... with stable shareholder returns
… with stable shareholder returns Quarterly Net Profit | KD million 23.8 20.0 20.6 17.0 17.6 17.7 17.1 17.5 17.6 16.1 5.0 11.5 3.5 4.0 2.5 4.0 10.8 7.9 16.1 17.5 15.6 13.5 13.6 15.2 13.6 12.3 9.2 9.2 Q2’11 Q2’12 Q3’11 Q3’12 Q4’11 Q4’12 Q1’12 Q1’13 Q2’12 Q2’13 2011 Quarterly Net Profits 2012 Quarterl
Slide 14: Burgan Bank – By Country
F) sy ’7e@ BURGAN BANK Burgan Bank — F, By Country Burgan Bank Group: Kuwait - Jordan - Turkey - Algeria - Iraq - Tunisia - Lebanon 14
Slide 15: Diversification Benefits Burgan Balance Sheet & P&L
Diversification Benefits Burgan Balance Sheet & P&L… Burgan Bank Contribution Summary Q2’13(1) Total Assets 59.4% 13.7% 6.2% 11.5% 6.9% 2.2% Customer Loans 60.1% 15.0% 7.1% 16.2% 1.4% 0.2% Customer Deposits 58.1% 15.3% 7.2% 9.8% 7.8% 1.9% Revenue 45.7% 17.9% 14.5% 11.8% 6.9% 3.3% Operating Profit 55
Slide 16: ...with stable performance from all the subsidiaries
…with stable performance from all the subsidiaries Net Loans(1) | KD million Customer Deposits(1) | KD million 2,055 2,407 1,867 2,135 513 555 633 504 569 298 404 324 195 243 224 47 5 7 167 67 78 31 Kuwait Jordan Algeria Turkey Iraq Tunisia Kuwait Jordan Algeria Turkey Iraq Tunisia Q2'12 Q2'13 Q2'12
Slide 17: Key Developments
BURGAN BANK >] ol sp =a Key Developments Burgan Bank Group: Kuwait - Jordan - Turkey - Algeria - Iraq - Tunisia - Lebanon 7
Slide 18: Burgan Bank Turkey Update
Burgan Bank Turkey Update Integration Highlights Key Financial Metrics Q2’2013 | KD million 1 RISK REVIEW: Total Assets KD 804 million +10% ► New credit architecture has been introduced. ► In process to upgrade market and liquidity risk +8% management capabilities. Customer Loans KD 555 million +15
Slide 19: FIM Bank Update
FIM Bank Update Acquired Stake 1 Debt to Assets swap between Burgan Bank and Al Massaleh was executed on 20th June, 2013. Consequently, Burgan Bank owning 24.49% shares in FIMBank. 2 UGB co-investment acquiring 12.56% shares of FIMBank from Al Massaleh on 20th June, 2013. 3 UGB and FIMBank conver
Slide 20: FIM Bank Capabilities & Opportunities
FIM Bank Capabilities & Opportunities EU Operating License Structured Trade Diversification of & Loan Risk Syndication Global FIM Bank Successful Network & Product Capabilities & Portfolio Presence Opportunities Unique Factoring & Business Model Fortaiting Best in Class 20
Slide 21: Performance vs. Peers
>] ol sp Sais BURGAN BANK Performance vs. Peers Burgan Bank Group: Kuwait - Jordan - Turkey - Algeria - Iraq - Tunisia - Lebanon 21
Slide 22: Local Peers – Q2 2013 Ranking
Local Peers – Q2 2013 Ranking Customer Loans Growth | KD million Customer Deposits Growth | KD million 31.4% 1 39.7% 1 22.6% 2 29.6% 2 7.1% 3 13.9% 3 3.0% 4 (0.5%) 4 2.1% 5 (3.4%) 5 Revenues Growth | % ROTE(1)(2) | % 47.5% 1 31.9% 1 26.7% 2 11.7% 2 9.6% 3 3 8.1% 7.7% 4 4 5.6% 5 5 (6.3%) 5.2% (1)Burg
Slide 23: Regional Peers – Q2 2013 Ranking
Regional Peers – Q2 2013 Ranking Customer Loans Growth | KD million Customer Deposits Growth | KD million 39.2% 1 39.7% 1 31.4% 2 32.7% 2 26.3% 3 29.6% 3 22.6% 4 17.3% 4 17.7% 5 15.6% 5 9.7% 6 14.3% 6 3.3% 7 14.2% 7 2.0% 8 6.1% 8 Revenues Growth | % ROTE(1)(2) | % 51.4% 1 31.9% 1 47.5% 2 25.4% 2 33.
Slide 24: Conclusion
>] ol sp Sais BURGAN BANK Conclusion Burgan Bank Group: Kuwait - Jordan - Turkey - Algeria - Iraq - Tunisia - Lebanon 24
Slide 25: ... In Summary
… In Summary Solid Operating Performance with access & BUSINESS exposure to high growth markets delivering resilient PERFORMANCE underlying earnings Healthy Balance Sheet maintained growth YoY & LIQUIDITY & CAPITAL QoQ supported by International operations performance with CAR at 17.6% & Tier 1 at 1
Slide 26: Thank You
DQ BURGAN BANK Thank You Burgan Bank Group: Kuwait - Jordan - Turkey - Algeria - Iraq - Tunisia - Lebanon 26
Slide 27: Appendix
>] ol sp Sais BURGAN BANK Appendix Burgan Bank Group: Kuwait - Jordan - Turkey - Algeria - Iraq - Tunisia - Lebanon 27
Slide 28: External Recognitions
External Recognitions…. Q3 2012 Q4 2012 Q1 2013 Q2 2013 Best Private Bank Best Bank in Best Banking Best Banking in Kuwait Capital Jordan for 2012 CEO Kuwait 2013 Group In Kuwait Finance Global Banking & Global Banking & World Finance International Finance Review Finance Review 2013 Best Private Bes
Slide 29: Total Share Returns Analysis
Total Share Returns Analysis Share Price Performance vs. Peers 160 150 140 130 120 110 100 90 80 Jan-12 Apr-12 Jul-12 Oct-12 Jan-13 Apr-13 Jul-13 NBK CBoK ABK GBK BB 29 Source: Bloomberg.