National Bank of Kuwait Investor Presentation April 2019 - PowerPoint PPT Presentation

National Bank of Kuwait Investor Presentation April 2019

Disclaimer THE INFORMATION SET OUT IN THIS PRESENTATION AND PROVIDED IN THE DISCUSSION SUBSEQUENT THERETO DOES NOT CONSTITUTE AN OFFER OR SOLICITATION OF AN OFFER TO BUY OR SELL SECURITIES. IT IS SOLELY FOR USE AT AN INVESTOR PRESENTATION AND IS PROVIDED AS INFORMATION ONLY. THIS PRESENTATION DOES NOT CONTAIN ALL OF THE INFORMATION THAT IS MATERIAL TO AN INVESTOR. This presentation has been prepared by (and is the sole responsibility of) National Bank of Kuwait S.A.K.P . ( the “ Bank ” ). The information herein may be amended and supplemented and may not as such be relied upon for the purposes of entering into any transaction. This presentation may not be reproduced (in whole or in part), distributed or transmitted to any other person without the Bank's prior written consent. The information in this presentation and the views reflected therein are those of the Bank and are subject to change without notice. All projections, valuations and statistical analyses are provided to assist the recipient in the evaluation of the matters described herein. They may be based on subjective assessments and assumptions and may use one among alternative methodologies that produce different results and, to the extent that they are based on historical information, they should not be relied upon as an accurate prediction of future performance. These materials are not intended to provide the basis for any recommendation that any investor should subscribe for or purchase any securities. This presentation does not disclose all the risks and other significant issues related to an investment in any securities/transaction. Past performance is not indicative of future results. National Bank of Kuwait is under no obligation to update or keep current the information contained herein. No person shall have any right of action against the Bank or any other person in relation to the accuracy or completeness of the information contained in this presentation. No person is authorised to give any information or to make any representation not contained in and not consistent with this presentation, and, if given or made, such information or representation must not be relied upon as having been authorised by or on behalf of the Bank. This presentation does not constitute an offer or an agreement, or a solicitation of an offer or an agreement, to enter into any transaction (including for the provision of any services). No assurance is given that any such transaction can or will be arranged or agreed. Certain statements in this presentation may constitute forward-looking statements. These statements reflect the Bank ’ s expectations and are subject to risks and uncertainties that may cause actual results to differ materially and may adversely affect the outcome and financial effects of the plans described herein. You are cautioned not to rely on such forward-looking statements. The Bank does not assume any obligation to update its view of such risks and uncertainties or to publicly announce the result of any revisions to the forward-looking statements made herein. 1

Contents Section 1 Overview of NBK Section 2 Overview of Operating Environment Section 3 Strategy and Business Overview Section 4 Financial Performance (Historical) Section 5 Performance Overview 1Q 2019 Section 6 Appendix 2

NBK at a Glance Snapshot Financial Snapshot  National Bank of Kuwait S.A.K.P. ( “ NBK ” or the “ Bank ” ) was USD million 2016 2017 2018 established in 1952 as the first local bank and the first shareholding Total Assets 79,917 85,838 90,432 company in Kuwait and as the first indigenous bank in the GCC. Loans, advances & Islamic financing 44,878 47,816 51,116  The Bank is the leading banking group in Kuwait in terms of assets, Customer Deposits 41,570 45,432 47,441 customer deposits and customer loans and advances. Background  Total Equity 11,226 11,741 12,203 NBK is the dominant bank in Kuwait with more than 30% market share of assets. 2,457 2,712 2,912 Net Operating Income  The Bank was ranked amongst the 50 safest banks in the world by 973 1,063 1,222 Net Profit attributable Global Finance and was named the most valuable banking brand in Cost to Income (%) 33.8% 32.3% 31.3% Kuwait and among the top 10 in the region by Brand Finance. Net Interest Margin (%) 2.47% 2.61% 2.69%  The Bank was established by a group of leading Kuwaiti merchants NPL Ratio (%) 1.28% 1.42% 1.38% and it has retained the same core shareholder base since that time.  NBK ’ s shares are listed on the Kuwait Stock Exchange since 1984 Loan Loss Coverage Ratio (%) 365.2% 287.5% 228.1% Ownership with only one shareholder holding owning more then 5% of the Return on Average Equity (%) 10.2% 10.8% 12.0% Bank ’ s share capital (PIFSS owns 5.53% as of December 2017). Tier 1 Ratio (%) 15.7% 15.8% 15.3% NBK ’ s  market capitalisation as at 31 December 2018 was Capital Adequacy Ratio (%) 17.7% 17.8% 17.2% USD 16.8 bn.  The Bank ’ s core businesses are (i) consumer and private banking, Overview of Regional and International Geographic Presence (ii) corporate banking, (iii) Islamic banking and (iv) investment banking and asset management. Operations Middle East  Europe Location Branches The Bank operates across 15 countries with a predominant focus on Kuwait 68 Location Branches the MENA region. Egypt 50 London 2 Turkey 13 Geneva 1 Iraq 5 Credit Ratings Paris 1 Lebanon 3 Jordan 1 Bahrain 2 Rating Agency Long Term Rating Standalone Rating Outlook UAE 2 Saudi Arabia 2 Aa3 a3 Stable A+ a- Stable US Asia Location Branches Location Branches AA- a- Stable New York Shanghai 1 1 Singapore 1 Notes: Through out the investor presentation, the USD/KD exchange rate used is 0.30330 for year-end figures and 0.30420 for quarterly figures. The rate is based on the Central Bank of Kuwait ’ s closing exchange rate as of 31/12/2018 and 31/03/2019 respectively. 3

Key strengths High credit ratings and among the Largest banking group in Kuwait with top brand values regionally dominant market position   As at 31 December 2018, the Bank was the largest NBK has one of the highest credit ratings in the MENA region bank in Kuwait in terms of total assets, loans and  customer deposits. In addition, the Bank enjoys a Ranked amongst the 50 safest banks in the world by dominant market share across its business segments Global Finance, named most valuable banking brand  in Kuwait and among the top 10 in the Middle East by NBK also has one of the largest and most diversified distribution networks Brand Finance Only banking group in Kuwait to provide Sound and consistent both conventional and Islamic banking financial performance  Following its consolidation of Boubyan Bank in 2012,  Long history of profitability, even throughout the global NBK became the only banking group in Kuwait to offer financial crisis both conventional and Islamic banking services  Excellent asset quality with an NPL ratio standing at  This has allowed the Bank to leverage off the 1.38% at end-2018 opportunities across both markets, particularly given  Strong liquidity serving as a buffer in times of need the growing importance of Islamic Finance in Kuwait A strong regional and Stable shareholder base and international network strong management team  Established in 1952 by a group of leading Kuwaiti  Operations in 15 countries, 9 of which are in the merchants and has retained the same core MENA region. shareholder base since  The Bank continues to explore opportunities to expand  NBK ’ s stable shareholder base is complemented by a geographically with a primary focus on further strong and stable Board of Directors and a long- strengthening operations in MENA region serving executive team with in-depth experience Strong investment banking capability  NBK conducts its investment banking and asset management business through its subsidiary, Watani Investment Company K.S.C.C. (Known as NBK Capital) 4

Rating Excerpts “ The standalone baseline credit assessment (BCA) of a3, reflects the bank's (1) dominant position in its domestic market, underpinning its resilient core profitability and growth prospects; and (2) robust financial fundamentals including consistently strong asset quality, as well as adequate ” capitalisation and liquidity. Moody ’ s – 25 March 2019 “ We view NBK's business position as "strong," reflecting the bank's leading position in Kuwait. We believe NBK ’ s business model, which is more diversified than that of many emerging peers, will help the group exhibit resilience in the challenging economic environment. … . The stable outlook reflects our expectation that NBK's asset quality and capitalization will remain relatively stable, its market position strong, and its funding and ” liquidity relatively unchanged. Standard & Poor ’ s – 22 June 2017 “ NBK ’ s Viability Rating (VR) reflects its leading franchise and diversified business model, strong management team, strong asset quality, stable ” profitability, solid capitalisation, stable funding and liquidity and a stable operating environment in Kuwait. Fitch Ratings – 27 November 2018 5

Contents Section 1 Overview of NBK Section 2 Overview of Operating Environment Section 3 Strategy and Business Overview Section 4 Financial Performance (Historical) Section 5 Performance Overview 1Q 2019 Section 6 Appendix 6