Burgan Bank · KSE:BURG
Burgan Bank — 9M 2019 Earnings Presentation
14 slides from Burgan Bank's earnings presentation, Oct 28, 2019
Slide 1: Burgan Bank Group Investor Presentation 9M 2019 Financial Results
BURGAN BANK GROUP INVESTOR PRESENTATION 9 MONTHS 2019 FINANCIAL RESULTS 28TH OCTOBER 2019
Slide 2: Table of Contents
TABLE OF CONTENTS Contents Page 9M’19 Performance Highlights 4 Key P&L Metrics 5 Asset Quality 7 Key Balance Sheet Metrics 8 Capital & Liquidity 9 9M’19 Performance by Entities 10 Q3’19 Performance Update 11 Summary 12 2
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 First N
Slide 4: 9M'19 Performance Highlights
9M’19 PERFORMANCE HIGHLIGHTS 9M 2019 9M 2018 TREND Kuwait +7.7% (4.8%) Loan Growth Group +1.5% (6.6%) PRUDENT GROWTH Kuwait +6.2% (2.6%) Deposit Growth Group +3.3% (3.4%) Kuwait 2.1% 2.3% STABLE MARGINS Net Interest Margin Group 2.8% 2.9% & LOWER COST OF Kuwait 0.3% 1.1% CREDIT Cost of Credit Group
Slide 5: Consistent Revenue Levels Driven by Stable Margins
CONSISTENT REVENUE LEVELS DRIVEN BY STABLE MARGINS Revenue & Margins(1) | KD mn, % Operating Profit & Efficiency(2) | KD mn, % 43.3% 41.9% 2.9% 2.8% 2.6% 39.2% 2.3% 2.1% 2.1% 207 32.5% 179 24 178 29.3% 29.1% 6 4 87 74 126 79 104 102 24 4 6 34 47 41 105 109 115 72 69 77 9M'17 9M'18 9M'19 9M'17 9M'18
Slide 6: Lower Cost of Credit Resulting in Better Earnings
LOWER COST OF CREDIT RESULTING IN BETTER EARNINGS Cost of Credit(1) | KD mn, % Net Income(2) & Returns(3) | KD mn, % Due to impact of 1.4% 12.6% Capital Increase in Q4’18 0.8% 0.8% 1.1% 10.2% (4) 0.8% 10.4% 0.3% 71 67 4 54 14 17 45 15 20 27 10 26 67 10 21 52 51 18 16 15 6 (2) 9M'17 9M'18 9M'19 Group
Slide 7: Marginal Increase in NPLs
MARGINAL INCREASE IN NPLS NPL Ratio (%) NPLs (KD mn) & Coverage (%) 371.1% 288.6% 4.2% 178.7% 169.9% 162.0% 126.4% 3.0% 2.9% 3.3% 207 1.9% 89 132 140 1.5% 71 81 118 51 68 9M'17 9M'18 9M'19 9M'17 9M'18 9M'19 Kuwait International Group NPL Ratio Kuwait NPL Ratio Group Coverage Ratio Kuwait Coverage Ra
Slide 8: Strong Growth in Kuwait Balance Sheet
STRONG GROWTH IN KUWAIT BALANCE SHEET Customer Loans (KD bn) & Sector Concentration (%) Customer Deposits (KD bn) & Deposits by Type (%) 4.5 4.2 4.2 4.0 3.8 4.0 1.6 1.3 1.4 1.4 1.3 3% 18% 1.4 2% 7% 25% 30% 11% 2.9 2.7 2.9 2.5 2.5 2.6 67% 5% 11% 21% 9M'17 9M'18 9M'19 Personal Real estate 9M'17 9M'18
Slide 9: Optimal Capital and High Liquidity Levels
OPTIMAL CAPITAL AND HIGH LIQUIDITY LEVELS Regulatory Capital (KD mn) Regulatory Liquidity Metrics (%) 2,500 20.0% 18.0% 16.4% 16.5% 16.6% 164.9% 2,000 16.0% 155.5% 14.0% 14.0% 120.4% 1,500 10.9% 10.8% 11.0% 12.0% 10.5% 111.1% 112.7% 10.0% 100% 974 1,000 888 902 8.0% 172 150 166 154 6.0% 145 145 500
Slide 10: Improving Trends in Critical KPIs
IMPROVING TRENDS IN CRITICAL KPIS CONTRIBUTION(1), (2) GROWTH(3) KPI’S(4),(5),(6) ASSETS REVENUES NET INCOME LOANS NIM ∆% CI RATIO ∆% COC ∆% NPL RATIO ∆% Kuwait (20 (87 71% 59% 79% +8% 2.1% bps) 32.5% +340 bps 0.3% bps) 1.9% bps +40 CONTRIBUTION GROWTH KPI’S(4),(5),(6) ASSETS REVENUES NET INCOME LOA
Slide 11: Strong Q3'19 Performance
STRONG Q3’19 PERFORMANCE Q3’19 Q3’18 Q3’17 CAGR BB Group Key Metrics (KD mn) (KD mn) (KD mn) (%) Revenue 61.9 67.5 56.6 +4.6% OPEX (25.7) (25.9) (26.5) (1.5%) Operating Profit 36.3 41.5 30.2 +9.6% Provisions (9.5) (17.7) (11.7) (9.9%) Net Income* 22.7 20.5 15.0 +22.9% * Attributable to equity shareh
Slide 12: Summary
SUMMARY 1 Solid financial performance amidst challenging operating environment Asset Quality remains stable however risk management continues to be a 2 key focus area 3 Burgan delivered yet another quarter with strong and consistent earnings 12
Slide 13: Thank You
Thank You =H ul Lo OL... 9 js Sms ‘79 BURGAN BANK
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