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14 May 2007
13:20 hrs
Investor PresentationInvestor Presentation
www. shafafiyah.com.kw www. shafafiyah.com.kw
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Agenda of Presentation
2006: Key Milestones
2007: Road Map
Performance Highlights: Last 5 Years
2007: Destination
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2006: Key Milestones
Record profits at US$ 101 million over 25% of 2005 US$ 81 million
BIS ratio at 28.3% and balance sheet liquidity at 38%
ROAE at 23.5% and ROAA at 5%. Operating expense to operating income low at 30.4% (2005: 27%)
Assets under management exceed US$ 6.4 billion
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2006: Key Milestones Cont/…
Improved franchise value– Obtained investment grade rating Baa3 from Moody’s– Capital Intelligence upgraded foreign currency rating to BBB+
Expansion of financial services network– Commercial banking license obtained in Syria. Syria Gulf Bank (SGB)
will be operational 2Q 2007. UGB owns 24% equity stake and will manage SGB
– United Gulf Financial Services, Qatar operational since June 2006– Management of Bank of Baghdad, Iraq/new business initiatives
launched– Tunis International Bank Representative Office in Libya operational– Manafae Investment Company in Kuwait operational– MOU signed to establish joint venture investment company in Tunis– MOU signed to establish an investment company in Abu Dhabi
Improved funding mix– Raised Lower Tier 2 US$ 100 million floating rate notes with maturity of
10 years– Increased short term interbank lines from US$ 800 million (December
2005) to US$ 1.1 billion resulting in enhanced credibility and liquidity
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Our People
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Agenda of Presentation
2006: Key Milestones
2007: Road Map
Performance Highlights: Last 5 Years
2007: Destination
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2007: 1Q Key Milestones
Record 1Q07 profit of US$ 115.5 million including exceptional gains of US$ 88 million on asset sales
US$ 15 million gain on UPAC sale to hit 2Q07
BIS ratio more than 30% and balance sheet liquidity in terms of bank and call deposits at 25%
Unrecognized (hidden) value increased to US$ 312 million
Share price reflects exceptional performance
Market capitalization in excess of US$ 1 billion
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2007: Road Map
Bank of Baghdad new branches
planned in north
Syria Gulf Bank to start commercial operations/UGB management
Continued growth of KAMCO wealth
management
Investment joint venture
company in Tunis
Investmentjoint venture
company in UAE
Fullyunderwritten
5-year syndicated facility
US$ 125 million
Exits & Realizations:Telecommunications assets, UFK, UPAC
Algeria Gulf Bank to expand Branch
network to 6
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2007: Road Map Progress
ALGERIA
TUNISIA
LIBYAEGYPT
SAUDIARABIA
OMAN
SYRIAIRAQ
KUWAIT
BAHRAIN QATAR
JORDAN
PALESTINE
CYPRUS
Bank of Baghdad – commercial bank, Iraq KAMCO – asset management company, Kuwait Jordan Kuwait Bank – commercial bank, Jordan
— Jordan Kuwait Bank, Branch in Cyprus
— Jordan Kuwait Bank, Branch in Nablus (Palestine) Algeria Gulf Bank – commercial bank, Algeria Tunis International Bank – commercial bank, Tunisia UGB Securities – brokerage company, Bahrain Syria Gulf Bank – commercial bank, Syria United Gulf Financial Services Company (UGFS), Qatar TIB representative office in Libya Investment joint venture company in UAE (under formation) Investment joint venture company in Tunis (under formation) Investment company in Jordan (planned) Investment company in Syria (planned)
UAE
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Agenda of Presentation
2006: Key Milestones
2007: Road Map
Performance Highlights: Last 5 Years
2007: Destination
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Performance Highlights: Last 5 Years
1Q07 2006 2005 2004 2003 2002
US$ millions
Total Revenue 176 242 199 105 112 58
Operating Income 155 176 160 84 93 38
Shareholder’s Equity 497 489 376 280 260 211
Total Assets 2,192 2,350 1,687 1,388 1,187 939
Net Income 115 101 81 43 36 10
%
Return on Average Equity 24.4 23.5 24.7 16.0 15.4 4.9
Return on Average Assets 5.1 5.0 5.3 3.4 3.4 1.1
Dividends - 34.6 27.5 15 14 -
US Cents
Book Value Per Share 61.9 61.0 48.9 36.6 34.1 27.9
Earnings Per Share (Basic) 14.4 12.8 10.5 5.67 4.74 1.3
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Agenda of Presentation
2006: Key Milestones
2007: Road Map
Performance Highlights: Last 5 Years
2007: Destination
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2007: Destination
1.1%
3.4% 3.4%
5.3% 5.0%
8.2%
2002 2003 2004 2005 2006 2007E
Return on Average Assets
Return on Average Equity
1.3
4.75.7
10.512.8
24.1
2002 2003 2004 2005 2006 2007E
In US Cents
Earnings Per Share
Net Income
4.9%
15.4% 16.0%
24.7% 23.5%
36.0%
2002 2003 2004 2005 2006 2007E
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36 43
81101
195
2002 2003 2004 2005 2006 2007E
In US$ Million
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Projected vs Achieved Performance
Actual vs Projected Net Income
4250
85
195
43
81
101
2004 2005 2006 2007E
Projected
Actual
In US$ Million
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