B URGAN B ANK G ROUP S HAFAFIYAH P RESENTATION FY 2018 F INANCIAL R - PowerPoint PPT Presentation

B URGAN B ANK G ROUP S HAFAFIYAH P RESENTATION FY 2018 F INANCIAL R ESULTS

FY2018 K EY H IGHLIGHTS … ∆% FY 2017 FY 2018 265.3 +11% 239.4 Revenue KD mn S TRONG E ARNINGS Net Income KD mn 65.2 82.6 +27% G ROWTH 2018 P ERFORMANCE 31.0 +28% 24.2 EPS (1) Fils 10.7 % H IGH 8.3 % RoE (2) +230 BPS S HAREHOLDERS ’ 7.0 12.0 (3) R ETURNS Dividend per share Fils +71% 2.9 % 2.6 % +30 BPS NIM (4) C ONTINUED I MPROVEMENT 42.1 % 45.6 % Cost-to-Income Ratio (350 BPS ) A CROSS K EY M ETRICS 11.9 % 10.9 % +100 BPS CET1 Ratio (1) Earnings per share for shareholders (after AT1 cost); (2) Returns on opening balance of Shareholders’ Equity (after AT1 c ost); (3) Recommended Dividend per share, subject to shareholders’ approval; (4) Net Interest Margin based on Average Interest Earning Assets. 2

R ESULTS D RIVEN BY I MPROVING M ARGINS AND C ONTINUED E FFICIENCY … Revenue (KD mn) & Margins (%) (1) Operating Profit (KD mn) & Efficiency (%) 2.9% 48.5% 45.6% 2.6% +30bps Y-o-Y (2) 42.1% 2.4% (350bps) Y-o-Y (2) +18% Y-o-Y 265 +11% Y-o-Y 239 235 81 69 79 154 130 121 184 171 156 FY 2016 FY 2017 FY 2018 FY 2016 FY 2017 FY 2018 Net Interest Income Non Interest Income Operating Profit Cost to Income Ratio Net Interest Margin Consistent growth Strong Rebound Consistent Reduction Higher Yields; in in in 1 2 3 4 +80bps Y-o-Y Net Interest Income Non-interest Income Cost-to-Income Ratio CAGR Growth (1) NIM based on Average Interest Earning Assets; (2) Represent absolute change. 3

…D ELIVERING S TRONG B OTTOMLINE G ROWTH & I MPROVED R ETURNS Net Income (KD mn) & Earnings Per Share (Fils) RoE (%) (1) & Dividend Per Share (Fils) 31 10.7% +230bps Y-o-Y (2) +28% Y-o-Y 27 24 9.0% 8.3% +27% Y-o-Y +71% Y-o-Y 83 12 68 65 7 5 FY 2016 FY 2017 FY 2018 FY 2016 FY 2017 FY 2018 Net Income Earnings Per Share DPS RoE Strong Increase 71% Higher Dividends & in Improved RoE: +230bps Y-o-Y 1 2 3 5% Bonus Shares EPS; +28% Y-o-Y CAGR Growth (1 ) Returns on opening balance of shareholders’ equity (after AT1 cost); (2) Represents absolute change. 4

…. WHILE A SSET Q UALITY C ONTINUES TO BE S TABLE NPLs (KD mn) & Coverage (%) (1) FY 2016 FY 2017 FY 2018 NPL Ratios (%) 339% +54% Y-o-Y (2) 285% 4.1% 170% +13% Y-o-Y (2) 168% 155% 3.1% 120% 2.7% 2.7% 1.8% 1.6% (4%) Y-o-Y (20bps) Y-o-Y (2) 196 133 128 FY 2016 FY 2017 FY 2018 FY 2016 FY 2017 FY 2018 NPLs Group Coverage Ratio Group NPL Ratio Kuwait NPL Ratio Kuwait Coverage Ratio NPL Ratios Coverage Ratios NPLs declined further Group: Stable at 2.7% Group: Higher at 168% by 1 2 3 Kuwait: Improved to 1.6% Kuwait: Inreased to 339% 4% Y-o-Y CAGR Growth (1) NPL Coverage Ratio based on provisions only; (2) Represents absolute change. 5

… WITH W ELL -D IVERSIFIED L OAN B OOK AND F UNDING S TRUCTURE Customer Loans (KD bn) & Loans by Sector (%) Customer Deposits (KD bn) & Deposits by Type (%) FY 2018 (%) FY 2018 (%) 4.2 4.4 4.3 5% 19% 33% 33% 2% 37% 7% 29% 30% 12% 61% 4.2 3.7 3.8 6% 67% 67% 63% 11% 19% Personal Real estate Demand Saving Manufacturing Commerce Construction Oil & Gas Time Other FY 2016 FY 2017 FY 2018 Others FY 2016 FY 2017 FY 2018 Kuwait International Customer Deposits ^ Kuwait contributes to Time deposits represent 61% 2/3 rds of Well-diversified Portfolio 1 2 3 of Group Customer Deposits Group’s Loan Book 6

…. AND E NHANCED C ORE C APITAL L EVELS Regulatory Capital (KD mn) 2,500 20.0% 17.4% +270bps +220bps +340bps 16.7% 16.2% 18.0% 2,000 16.0% 14.0% 14.0% 11.9% +70bps +40bps +140bps 11.2% 10.9% 1,500 12.0% 10.5% 10.0% 1,001 924 907 1,000 8.0% 170 154 151 146 145 146 6.0% 500 4.0% 686 624 610 2.0% - 0.0% 2016 2017 2018 5,435 5,759 5,716 RWAs CET1 AT1 Tier II CET 1 Ratio CAR Ratio Min. Required CAR Min. Required CET 1 ^ ^ Successful Rights Issue in Continued focus on RWA Strong Profit Generation 1 2 3 Q4 ’ 18 Efficiency Buffers Calculated as excess over minimum required CBK ratios ^ CET1 include retained earnings after dividends 7

… W HILE I MPROVING KPI S FOR K EY B USINESSES OF THE G ROUP C ONTRIBUTION G ROWTH Y O Y (1) KPI FY 2018 (2) L OANS N ET I NCOME L OANS NIM CI R ATIO ∆% ∆% Kuwait 67 % 76 % +2% 2.3 % +20 32.3 % +130 bps bps Turkey (1640 23 % 11 % (18%) 3.7 % +40 42.8 % bps) bps Algeria (10 (880 10 % 11 % +6% 6.9 % 38.7 % bps) bps) (40 Iraq 1 % -0.5 % (22%) 1.4 % 101 % +3130 bps) bps Tunisia (770 0.2 % 3 % +6% 2.5 % 35.8 % +110 bps) bps FY’ 18 Loans Contribution in KD FY’18 Net Income Contribution in KD (1) Growth year on year in KD; (2) KPIs in Local Currency. Note: Contribution percentages are rounded figures. 8

… AND A CHIEVING P ROGRESSIVE G ROWTH O VER T HE L AST 15 Y EARS Total Assets | KD mn Revenues | KD mn 9% 8% 11% 8% 7,312 265.3 3,943 121.1 1,920 54.6 FY 2003 FY 2008 FY 2018 FY 2003 FY 2008 FY 2018 Burgan Bank Revenues Burgan Bank Total Assets Operating Profits before provisions | KD mn Net Income | KD mn 10% 7% 10% 3% 153.5 82.6 87.6 37.1 35.6 20.4 FY 2003 FY 2008 FY 2018 FY 2003 FY 2008 FY 2018 Burgan Bank Net Income Burgan Bank Operating Profits before provisions Burgan Bank 15 years Compounded Annual Growth Rate (CAGR) Kuwait Local Conventional Peers Average CAGR 9 Note: Kuwaiti peers include NBK, CBOK, GBK, ABK. Note 2: All the Banks figures are based from the financial statements sourced from Bloomberg.

I N CONCLUSION  FY’18 results underscore the consistent progress made by Burgan Bank  In FY’18, Burgan Bank generated strong earnings for its shareholders:  Return on Equity: 10.7% (+230 bps)  Recommended Dividend Per share: 12 fils (+71%)  Burgan Bank shall continue to maintain its focus on:  Cautious Growth  Prudent Risk Approach  Superior Shareholders’ Returns 10

T HANK Y OU 11

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