Burgan Bank · KSE:BURG
Burgan Bank — H1 2020 Earnings Presentation
22 slides from Burgan Bank's earnings presentation, August 2020
Slide 1: Burgan Bank Group Investor Presentation Q1'20 & H1'20 Financial Results
BURGAN BANK GROUP INVESTOR PRESENTATION Q1’20 & H1’20 FINANCIAL RESULTS AUGUST 2020
Slide 2: Table of Contents
TABLE OF CONTENTS Contents Page Burgan’s Covid-19 Response 4-5 BoB Sale Cancellation 7 Q1’20 & H1’20 Financial Performance Review 9-18 Key P&L Metrics 9-12 Asset Quality 13 Key Balance Sheet Metrics 14-15 Capital & Liquidity 16-17 Performance Summary – Kuwait & International Operations 18
Slide 3: Burgan's Covid-19 Response
Burgan’s Covid-19 Response =H ul Lo OL... 9 js Sms ‘79 BURGAN BANK
Slide 4: Burgan's Swift Response to Support Customers, Community and Employees
BURGAN’S SWIFT RESPONSE TO SUPPORT CUSTOMERS, COMMUNITY AND EMPLOYEES IN THESE DIFFICULT TIMES KEY MEASURES 1 ✓ Loan Installments for Retail Banking customers and SMEs postponed for 6 months Customers ✓ Corporate & Private customers personally contacted to inform that limits are active ✓ Ensured smo
Slide 5: Fast-Tracked Digital Enhancements
FAST-TRACKED DIGITAL ENHANCEMENTS Customer registration^ on New Platform | # (‘000s) Client Activities Online | # (‘000s) 24 939 22 848 20 750 714 690 17 15 10 171 Feb-20 Mar-20 Apr-20 May-20 Jun-20 Jul-20 Feb-20 Mar-20 Apr-20 May-20 Jun-20 Jul-20 KEY RECENT DEVELOPMENTS Enhanced Omni channel Plat
Slide 6: BoB Sale Cancellation
BoB Sale Cancellation =H ul Lo OL... 9 js Sms ‘79 BURGAN BANK
Slide 7: Bank of Baghdad (BoB) Sale Transaction Cancelled
BANK OF BAGHDAD (BOB) SALE TRANSACTION CANCELLED ❖ The execution of the transaction was impacted due to volatile and uncertain Why was the BoB macroeconomic conditions on account of the COVID-19 pandemic Sale Cancelled? ❖ This rapidly changing situation caused the buyer to reconsider the transaction
Slide 8: Q1'20 & H1'20 Financial Performance Review
Q1’20 & H1’20 Financial Performance Review
Slide 9: Revenue Impacted by Rate Cuts
REVENUE IMPACTED BY RATE CUTS… Revenue & Margins^ | KD mn, % 2.8% 2.8% 2.8% 2.7% 2.7% 2.6% 2.3% 2.1% 116 108 34 34 66 70 62 60 50 28 47 22 19 19 13 15 82 74 37 44 43 42 41 32 Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 H1'19 H1'20 Net Interest Income Non-Interest Income NIMs ❖ CBK DR reduction of 125 bps dr
Slide 10: Focus on Operating Expenses Reduction
…FOCUS ON OPERATING EXPENSES REDUCTION… Operating Expenses & Efficiency | KD mn, % 49.2% 42.3% 42.1% 43.4% 41.8% 41.5% 39.4% 38.9% 49 47 28 26 28 21 24 23 Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 H1'19 H1'20 Expenses Cost to Income Ratio ❖ Cost Optimization measures implemented across the Group (H1’20 ex
Slide 11: Prudent Provisioning
… PRUDENT PROVISIONING … Cost of Credit^ | KD mn, % 1.6% 1.5% 1.3% 1.4% 0.9% 0.8% 0.8% 0.7% 32 23 16 15 16 7 8 10 Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 H1'19 H1'20 Provisions CoC ❖ KD 10mn of precautionary provisions booked in Q2’20 ^ Cost of Credit based on Loan Loss Provisions over Gross Loans; Q1-2
Slide 12: Leading to Reasonable Net Income Levels
…LEADING TO REASONABLE NET INCOME LEVELS… Net Income & Returns^ | KD mn, % 10.7% 4.9% 45 26 23 23 19 17 17 6 Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 H1'19 H1'20 Net Income RoE ❖ Lower Revenue along with Prudent Provision levels impacted the H1’20 Net Income ^ ROE is based on Net Income after perpetual c
Slide 13: With Impact on Asset Quality
.. WITH IMPACT ON ASSET QUALITY… NPLs & Coverage^ | KD mn, % 234.3% 248.6% 245.6% 282.8% 242.1% 185.8% 4.8% 3.0% 3.0% 3.1% 2.7% 2.5% 1.8% 1.9% 1.7% 1.7% 1.5% 1.6% 150 237 119 184 36 140 153 136 127 34 34 34 134 33 34 86 39 37 59 41 64 52 68 60 64 67 Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 Kuwait Interna
Slide 14: Loan Book Remains Well-Diversified
…LOAN BOOK REMAINS WELL-DIVERSIFIED … Customer Loans & Sector Concentration | KD mn , % 4,311 4,412 4,199 4,218 4,284 4,169 31 33 32 39 1,132 1,165 1,225 18% 1,277 1,299 1,231 2% 6% 29% 11% 3,059 3,179 3,216 2,859 2,868 2,948 11% 22% Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 Personal Real estate Manufactu
Slide 15: Continued Access to Stable Deposit Base
… CONTINUED ACCESS TO STABLE DEPOSIT BASE … Customer Deposits & Deposits by Type | KD mn, % 4,176 4,263 3,959 3,967 3,991 3,918 220 197 197 232 3% 1,104 1,141 1,063 1,088 1,103 1,113 28% 58% 2,875 2,850 2,831 2,980 2,659 2,622 10% Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 BB Kuwait International Ops BoB D
Slide 16: Supported by Optimal Capital Levels
… SUPPORTED BY OPTIMAL CAPITAL LEVELS… Regulatory Capital | KD mn, % 17.3% 17.0% 16.8% 2,500 16.6% 16.2% 15.7% 17.0% 14.0% 2,000 11.8% 11.6% 11.5% 11.0% 11.5% 12.0% 10.5% 1,500 10.4% 10.8% 8.0% 7.0% 991 983 1,033 988 1,005 1,000 974 170 170 175 176 172 177 146 146 154 153 155 155 2.0% 500 675 667 64
Slide 17: High Liquidity Levels
… HIGH LIQUIDITY LEVELS Liquidity Coverage Ratio (LCR) & Net Stable Funding Ratio (NSFR) ^ | % 200.0% 175.5% 180.0% 159.5% 155.5% 160.0% 151.9% 134.3% 140.0% 118.1% 115.8% 112.7% 112.3% 111.8% 120.0% 104.1% 100% 100.0% 106.7% 80.0% 80% 60.0% 40.0% 20.0% 0.0% Q1'19 Q2'19 Q3'19 FY 2019 Q1'20 Q2'20 LCR
Slide 18: H1'20 Performance (Kuwait & International Operations)
H1’20 PERFORMANCE (KUWAIT & INTERNATIONAL OPERATIONS) CONTRIBUTION NET KD million H1’20 H1’19 KPI % H1’20 H1’19 LOANS INCOME Revenue 57 80 NIM 1.7% 2.2% 73% 77% Expenses 20 26 CIR 35.5% 32.7% Provisions 17 4 CoC 1.0% 0.3% BB Kuwait# Net Income 19 47 NPL Ratio 1.7% 1.5% CONTRIBUTION KD million H1’20^
Slide 19: Summary
Summary
Slide 20: Summary
SUMMARY 1 H1’20 results reflect impact of the pandemic on Burgan Prudent risk management and strong cost control 2 enabled Burgan to generate positive returns Burgan is liquid and well-capitalized to weather the 3 current global crisis 20
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