Burgan Bank · KSE:BURG
Burgan Bank — Q1 2023 Earnings Presentation
20 slides from Burgan Bank's earnings presentation, May 10, 2023
Slide 1: Burgan Bank Group Investor Presentation Q1 2023 Financial Results
BURGAN BANK GROUP INVESTOR PRESENTATION Q1 2023 FINANCIAL RESULTS 10TH MAY 2023
Slide 2: Table of Contents
TABLE OF CONTENTS Contents Page Overview and Operating Strategy 4 -6 Key Updates 8 Financial Review - Key P&L Metrics 10 - 11 Financial Review - Asset Quality 12 Financial Review - Balance Sheet Metrics & Liquidity 13 - 14 Financial Review – Capital 15 Key Metrics by Franchise 16 Summary 18 2
Slide 3: Overview and Operating Strategy
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 76% 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: Key Updates
Key Updates el
Slide 8: Key Updates
KEY UPDATES 1 ➢ Capital benefit realized due to release of RWAs of KD 342mn. Sales Process of “Bank of Baghdad” ➢ Transaction price ensured minimal P&L impact, while recovering OCI loss of KD 6mn. Completed ➢ All in all, realized CET1 benefit of ~70bps 2 ➢ Growth contained with BBT’s RWAs maintained
Slide 9: Financial Review
Financial Review =H ul Lo OL... 9 js Sms ‘79 BURGAN BANK
Slide 10: Improved Topline Due to Higher Margins
IMPROVED TOPLINE DUE TO HIGHER MARGINS Revenue | KD mn Operating Profit | KD mn Net Income(1) | KD mn 30 8 55 27 12 53 4 26 1 48 4 5 5 14 6 1 11 26 4 23 47 42 (7) Q1'21 Q1'22 Q1'23 Q1'21 Q1'22 Q1'23 Q1'21 Q1'22 Q1'23 BB Group (excl BoB) BoB BB Group (excl BoB) BoB BB Group (excl BoB) BoB IAS 29 Impa
Slide 11: Underlying Net Income Higher
UNDERLYING NET INCOME “HIGHER” Net Income Evolution – Q1’23 vs Q1’22 | KD mn +0.1 (3.4) (0.4) 14.1 12.1 +2.5 +9.6 0.7 (6.6) (6.5) 7.6 11.4 Net Income - Increase in Reduction in Increase in Steep fall in Others Increased Net Income - IAS 29 Impact Net Income - Q1'22* Net Interest Non Interest Operati
Slide 12: Solid Asset Quality Maintained
SOLID ASSET QUALITY MAINTAINED Non-Performing Loans (NPLs) | KD mn NPL Ratio | % 6.0% 284 2.5% 1.8% 120 84 Q1'21 Q1'22 Q1'23 Q1'21 Q1'22 Q1'23 Provision Charge(1) | KD mn Provisions Coverage Ratio(2) | % 219.3% 20 2 155.4% 14 2 90.0% 19 12 4 Q1'21 Q1'22 Q1'23 Q1'21 Q1'22 Q1'23 BB Group (excl BoB) Bo
Slide 13: Well-Diversified & Liquid Asset Base
WELL-DIVERSIFIED & LIQUID ASSET BASE Total Assets | KD mn Customer Loan & Sector Concentration | KD mn 7,383 9% 7,190 6%2% 301 10% 6,900 38% 253 11% 4,197 7,082 6,647 25% Q1'21 Q1'22 Q1'23 Q1'23 Personal Real estate Manufacturing Commerce Construction Oil & Gas BB Group (excl BoB) BoB^ Others Liquid
Slide 14: Liquidity Ratios Strong
LIQUIDITY RATIOS STRONG Customer Deposits | KD mn Deposits by Type – Q1’23 | % 37% 4,421 60% 4,139 4,133 CASA Time Other Q1'21 Q1'22 Q1'23 Loan to Deposit Ratio (LDR) | % Regulatory Liquidity Metrics^ | % 100% 159.0% 134.7% 86.6% 90% 120.3% 83.2% 102.6% 107.6% 111.0% 79.9% 100% 80% Q1'21 Q1'22 Q1'23
Slide 15: Improved Capital Levels
IMPROVED CAPITAL LEVELS Regulatory Capital | KD mn, % 6,153 6,369 6,147 RWA reduction due to 2,500 sale of BoB 20.0% 18.0% 16.7% 17.0% 2,000 15.0% 14.0% 11.5% 11.7% 1,500 11.0% 10.5% 10.0% 10.5% 8.0% 1,083 1,104 1,027 1,000 230 229 5.0% 227 154 155 152 500 0.0% 648 700 721 - -5.0% Q1'21 Q1'22 Q1'23
Slide 16: International Franchises Continue Improving
INTERNATIONAL FRANCHISES CONTINUE IMPROVING CONTRIBUTION (1) KPIS(2) ASSETS NIM ∆% CI RATIO ∆% COC(3) ∆% NPL RATIO ∆% Kuwait (49 76% 1.7% +31 bps 56.1% +18.5 1.0% +29 1.4% bps) pps bps ASSETS NIM ∆% CI RATIO ∆% COC(3) ∆% NPL RATIO ∆% Turkey (6.8 (5.1 (230 12% 3.8% +57 bps 33.2% pps) -3.0% pps) 3.9%
Slide 17: Summary
Summary
Slide 18: Summary
SUMMARY Underlying Bottomline grew; reported Net Income impacted by IAS29 Credit costs stabilizing & overall asset quality remains very strong International operations’ contribution continues to increase 18
Slide 19: Thank You
Thank You =H ul Lo OL... 9 js Sms ‘79 BURGAN BANK
Slide 20: 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