Burgan Bank · KSE:BURG
Burgan Bank — Investor Presentation (March 2010)
33 slides from Burgan Bank's investor presentation, March 2010
Slide 1: Burgan Bank March 2010
Burgan g Bank March 2010 The information contained in this document has been provided on the basis of current knowledge, assumptions and expectations. In the event that any information is incorrect or any party misrepresented, Burgan Bank and its consultants cannot be held responsible for this. Vari
Slide 2: Content
Content 1 About Burgan Bank 2 The region & the group 3 Activities & Strategy gy 4 Financials &Challenges ahead 5 Conclusion 2
Slide 3: About Burgan Bank
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Slide 4: About Burgan Bank
About Burgan Bank 1977 1984 1997 2002 2003 - 04 Incorporated p as a Listed on the Kuwait Burgan g Bank Privatized. Burgan g Bank restructured Burgan Bank public shareholding Stock Exchange Government of Kuwait operations which laid underwent major divested it’s 61.0% emphasis on best practice, manag
Slide 5: Overview: Mission, Vision and Goals
About Burgan Bank Overview (contd…) O Our Mi i & Vi Mission i Vision Our Vision Our Goals To be the best of class financial service provider in the MENA region through sustained t i d execution ti off b bestt practice, ti To maximize value for all our stakeholders, clients, personnel innovation and
Slide 6: Regulated by the CBK and Listed on the Kuwait Stock Exchange
About Burgan Bank Regulated by the CBK and Listed on Burgan Bank the Kuwait Stock Exchange Majority shareholder • Shareholder Equity at USD 1,135m, market capitalization USD 1,199m • KIPCO: 56.03% and total balance sheet size of Other shareholders USD14,275m (as on 31 Dec 2009). • Basel II capital a
Slide 7: Overview: Ratings
About Burgan Bank Overview… R Ratings ti ((as off 31stt D December b 2009) Burgan Bank Ratings Country ratings S & P: ST : A-2 ST : A-1+ LT : BBB+ LT : AA- Moody’s: ST : P-1 ST : P-1 LT : A2 (FSR: D+) LT : Aa2 C.I.: ST : A2 ST : A1+ LT : A- A (FSR: BBB+) LT : AA- AA 7
Slide 8: Burgan Bank Group
About the region & Burgan Bank 2 Burgan Bank Group
Slide 9: The Acquisition
About the region & Burgan Bank Th Acquisition The A i iti United Gulf Bank and Burgan Bank are subsidiaries of Kuwait Projects Company (Holding) or KIPCO. KIPCO is listed on the Kuwait Stock Exchange and is part of a large business house with varied interests across the MENA Region in a number of bu
Slide 10: Entities snapshot
About the region & Burgan Bank E titi snapshot Entities h t 2009 Equity: USD 164.4M Equity: USD 97.2M Equity: USD 393.2M Equity: USD 82.0M Assets: USD 622.4M Assets: USD 680.7M Assets: USD 3,011.1M Assets: USD 491.0M Revenue: USD 61.0M Revenue: USD 28.8M Revenue: USD 168.4M Revenue: USD 30.9M Net pr
Slide 11: MENA region GDP growth
About the region & Burgan Bank MENA region i GDP growth th 11
Slide 12: Overview on country risk
About the region & Burgan Bank O Overview i on country t risk i k 12
Slide 13: Burgan Bank Group ambition
About the region & Burgan Bank B Burgan B Bankk G Group ambition biti 13
Slide 14: Our Activities & Strategy
3 Our Activities & Strategy
Slide 15: Strategy ambition, drivers and impact
Our Activities & Strategy Reposition Burgan Bank with active encouragement of major shareholder into unique MENA wide commercial banking platform… 1. Create greater shareholder value through expanded MENA f franchise hi 2. Sustainable growth in core banking profits Strategy 3. Best of class financia
Slide 16: Long range plan
Our Activities & Strategy L Long range plan l Presently, y, Burgan g Bank is committed through g its Long Range Plan (2010– 2014) to: • Substantially increase its market share and revenues from its client facing business with a major focus on Retail Banking and Private Banking through the execution
Slide 17: Our pillars
Our Activities & Strategy O ill Our pillars Three Pillars for Profitable Growth Ranked in the top 10% of world banks (Customer Satisfaction Index Client Delight Cli D li h Research by TNS / TRIM & Care Analysis 07/08) Implemented assessment & appraisal system to measure values & principles. Very clo
Slide 18: Financials & Challenges Ahead
4 Fina ancial Revieww and *USD 1 = KD 0.2868 stren ngths Share Price mance Perform Financials & Challenges Ahead Meeting the enges Challe
Slide 19: Loans & Advances and Customer Deposits
Financial Balance Sheet Review and strengths Loans & Advances Customer Deposits 9500 9,500 8,455 8500 8,500 7,835 8,424 7,437 7500 7,500 6 500 6,500 6500 5,748 , USD m USD m 5,500 5500 4,068 4,316 4,955 4500 4,500 3,655 3,500 2,619 2,789 3500 3,300 2500 2 500 2,500 2004 2005 2006 2007 2008 2009 2004
Slide 20: Operating Profit and Net Profit
Financial Profit & Loss Review and strengths Operating Profit Net Profit 400 387 6 387.6 300 260.9 350 305.5 250 300 271.3 194.3 222.7 200 250 147.8 200 170.9 150 129.2 127.4 103.2 150 100 100 50 21.7 50 USD' m USD m 0 0 2004 2005 2006 2007 2008 2009 2004 2005 2006 2007 2008 2009 20
Slide 21: NPLs to Loans and Provision Coverage
Financial Financial Strength Review and strengths NPL’s to Loans Provision Coverage 12% 280% 10.0% 240% 245% 10% 200% 8% 6.1% 160% 6% 109% 166% 120% 130% 4.1% 3.5% 4% 78% 80% 2% 1 7% 1.7% 57% 1.4% 40% 0% 0% 2004 2005 2006 2007 2008 2009 2004 2005 2006 2007 2008 2009 21
Slide 22: Financial Strength
Financial Financial Strength Review and strengths ¾ Capital Adequacy Ratio of 16.86%. ¾ Sound S d Li Liquidity idit with ith 10% off ttotal t l assets t in i T Bills Bill & Bonds. B d ¾ Investments account for only around 3% of total assets. ¾ Investment company exposure represents less than 4 % of
Slide 23: Financial Strength 2008-2009
Financial Financial Strength 2008 - 2009 Review and strengths Operating Expense and Cost-to-income Total Income ratio USD million 160 151.8 30% 116.3 28.1% 28% 120 26% 539.4 539 4 27.7% 27 7% 24% 422.2 80 22% USD m 40 20% 18% 0 16% 2008 2009 2008 2009 Operating Cost C:I Ratio Operating Profit before
Slide 24: Share Price Performance January 2009 to December 2009
Financial Share Price Performance Review and strengths Januaryy 2009 to December 2009 General Index : 3% up Banking Index : 3% up BB Share Price : 17% down* 10000 9,253 9,136 0.500 8,298 8,370 0.420 0.430 8,134 8,080 8000 7,817 0.400 0.370 0.380 6,987 0 350 0.350 6,765 6,745 0.300 KD Fils 6000 0.200
Slide 25: Why Invest in Burgan Bank
Share Price Why Invest in Burgan Bank Performance ¾ Redeployed capital into strategic core banking operating subsidiaries ¾ Managing downturn through systematic acquisitions & provisions ¾ Diversification of risks and sustainable sources of income ¾ Zero dilution of capital ¾ Additional financial st
Slide 26: Dividend Policy and Dividend Paid
Share Price Dividend Policy and Dividend Paid Performance Dividend Policy Statutory Requirement • 10% of Net profits towards Statutory Reserves • 10% of Net profits towards Voluntary Reserves BB Policy • 10% minimum additional voluntary Reserves. Dividend Paid 2004 : Cash 25 fils = 9 cents 2005 : Ca
Slide 27: Meeting Challenges: 2010
Meeting the Meeting Challenges: 2010 Challenges • Government support to investment sector & fiscal actions will be key determinants of the dynamics of the banking sector. • Local economic developments dependent on State Budget and Spending along with international economic developments Spending, dev
Slide 28: Meeting Challenges: 2010
Meeting the Meeting Challenges: 2010 Challenges • Investment portfolio constitutes around 4 % of total balance sheet size, given the minimal trading portfolio, BB is well insulated from further market volatility. • Group core operating income expected to grow by around 7 %. • The acquisitions are in
Slide 29: Integration of Subsidiaries after Acquisition
Meeting the Integration of Subsidiaries after Acquisition Challenges ¾ Working closely with Internationally well known consultants. consultants ¾ Integration to be in three waves ¾ Wave 1: Risk Mgmt., Accounts / MIS, Treasury, Internal Audit & Corp. Communications: Completed. Completed ¾ Wave 2: IT,
Slide 30: BB Group Profile as on 31st December 09
Financial Review Financial Strength and strengths BB Group Profile as on 31st December 09 ¾ Loans & Advances USD 7,835m ¾ Total Assets USD 14,275m ¾ Customer Deposits USD 8,455m ¾ Equity USD 1,135m ¾ Net Interest Income USD 355m ¾ Operating Income USD 539m ¾ Operating Profit USD 388m ¾ Net Profit US
Slide 31: Conclusion
5 Conclusion 31
Slide 32: Conclusion
Financial Review Conclusion and strengths A history of sound performance, healthy financials and sustained growth Based B d on core competence, t adapting d ti best b t practices, committed to established corporate values and sound corporate governance In the context of solid macroeconomics of the r
Slide 33: Q&A
Q Q&A Burgan Bank, P.O. Box 5389, Al Safat 12170, State of Kuwait – Kuwait. Telephone: +965 2298 8000 Fax +965 22988419 www.burgan.com