Upload
others
View
3
Download
0
Embed Size (px)
Citation preview
2
Agenda
Economic Overview
Results Overview
Performance Trends: 2nd Quarter 2013
Key Developments
Appendix: Financial & Other Achievements
4
2
3
4
5
6
7
8
9
1986 1989 1992 1995 1998 2001 2004 2007 2010 2013 2016
Actual growth Trend growth-4
-3
-2
-1
0
1
2
3
4
5
1986 1989 1992 1995 1998 2001 2004 2007 2010 2013 2016
Actual growth Trend growth
No major changes… with low growth ahead,
debt and unemployment remaining high….
Global Macro: As expected, weak fundamentals with stabilization sustained by policy hence
the risk of excessive liquidity creating new bubbles but not helping growth…
Source: IMF 2013 Data base & Burgan Bank Economic Research.
Dotcom
bubble Gulf War
Financial
Crisis
Advanced - Real GDP growth (%) Developing - Real GDP growth (%)
Asian Fin.
Crisis
Dotcom bubble,
China WTO
accession
Lo
we
r g
row
th p
rosp
ec
ts..
Up
wa
rd g
row
th t
ren
d b
roke
n..
Gulf War
Financial
Crisis
MENAT average GDP growth (%)
Slo
we
r M
EN
AT
gro
wth
ex
pe
cte
d..
Growth as expected is subdued, generally below-potential.
Many EU countries are poorer today than five year ago,
social pressures are likely to rise.
MENAT growth as expected is slower, while there is an
urgent need to create jobs.
MENAT low growth combined with low employment growth
could create political tensions and delay much needed
reforms.
MENAT banking: Solvency, prudence and liquidity at good
levels, more growth ahead.
Key takeaways
Note: Trend Growth is the forecasted growth.
0
2
4
6
8
10
12
14
KU JOR TUR ALG IRAQ TUN LEB QA UAE BAH EGP MOR KSA
2000-2009
2011-2018
6
Revenue 12.8% 47.5%|29.5%(1)
2nd Quarter 2013: Key Highlights
STRONG GROWTH IN REVENUE SUPPORTED BY
IMPROVED NET INTEREST INCOME AND NON INTEREST
INCOME RESULTS
NIMS ADVANCED DESPITE LOW INTEREST RATES
ENVIRONMENTS
HIGHEST RETURN RATIOS & NET INCOME REACHING
KD23.8M WITH (34.8% GROWTH YOY) BEFORE
PRECAUTIONARY RESERVES OF KD11.5M
ENHANCED ASSET QUALITY; WITH IMPROVED NPA
RATIO AND BETTER COVERAGE RATIO
MAINTAINED GROWTH YOY & QOQ IN BALANCE
SHEET; SUPPORTED BY INTERNATIONAL OPERATIONS
PERFORMANCE
OPTIMIZING BALANCE SHEET WITH SOUND
LIQUIDITY LEVELS
Q2’12 Q2’13
NPA’s, net of
collaterals
4.0%
1.9%
Loan
Growth 20.4% 31.4%|10.0%(1)
Solid Business
Performance
with access &
exposure to high
growth markets
Healthy Balance
Sheet generating
resilient stream
of earnings
Asset Quality
in comfortable
levels with
effective risk
management
ROTE(2) 27.7% 31.9%|32.8%(1)
NIM % 2.6% 2.91%|2.93%(1)
Deposit
Growth 26.6% 29.6%|16.8%(1)
Liquidity
Ratio 36.2% 34.0%|37.6%(1)
NPA’s
Coverage(3) 120% 246%
NPA’s Ratio 9.2% 4.2%
(1)Excl. BBT contribution including cost impact of new sub-debt in Q2’13.
(2)Excl. additional precautionary reserves.
(3)Total Provisions(General + Specific) to NPA’s net of collateral.
8
13.6 15.2
9.2
15.6 12.3
4.0 2.5 10.8
5.0 11.5 17.6 17.7
20.0 20.6
23.8
Q2'12 Q3'12 Q4'12 Q1'13 Q2'13
4.5 6.4
2.9 2.3 5.9
4.0 2.5 10.8
5.0
11.5 8.5 8.9
13.7
7.3
17.4
Q2'12 Q3'12 Q4'12 Q1'13 Q2'13
Net Profit | KD million(1)
Cost of Credit | KD million(1) Revenue | KD million(1)
Strong Financial and Operating Performance…
Key Indicators(1)
Burgan Bank Group Q2 12 Q2 13
Revenue Growth (YoY) 12.8% 47.5%|29.5%(2)
Operating Profit Growth (YoY) 8.2% 41.2%|40.9%(2)
Cost to Income Ratio 39.1% 41.7%|33.7%(2)
Jaws Ratio (YoY) (8.0%) (9.8%)|14.9%(2)
Loans to Cust. Deposits 81.9% 83.1%|77.1%(2)
Liquidity Ratio(3) 36.2% 34.0%|37.6%%(2)
NPA Ratio 9.2% 4.2%
NPA net of Collateral Ratio 4.0% 1.9%
ROE | ROE ex. Additional Provisions 12.7%|16.6% 10.0%|20.0%
ROTE | ROTE ex. Additional Provisions 21.0%|27.7% 15.6%|31.9%
48.1
48.2 51.2
48.1
62.3 7.9
8.7
56.0
71.0
Q2'12 Q3'12 Q4'12 Q1'13 Q2'13
BBT contribution after allocation of subdebt cost in KD million.
(1)Figures are reported after consolidation adjustments,
(2)Excl. BBT contribution in Q2’13
(3)Liquid assets comprises of Cash & Cash eq., Treasury bills & bonds and Due from Banks & OFIs.
Additional Provisions
2,697 3,484
Gross Loans in KD million. Additional Provisions
3,498 2,894 3,536
∆ 47.5%| 29.5%(2)
∆ 34.8%
9
…with improved Net Interest Income
29.9 30.8 30.2
35.0
43.0
Q2'12 Q3'12 Q4'12 Q1'13 Q2'13
25.6 28.0
28.7 29.9
26.8
30.8
23.5
30.2
104.6
118.9
FY 11 FY 12
Q2 Q2
Q1 Q1
2.6% 2.4% Net Interest
Margins(1)
2.6% 2.6% 2.2% 2.5%
Ne
t In
tere
st
Inc
om
e | K
Dm
n
(2) 2.9%
2.6%
(1)FY NIMs figures calculated based on the average of LTM of Interest Earning Assets.
(2)Q2 2013 NIM Figure excluding one off gain of KD5mn from recoveries.
10
…and Non-Interest Income
9.5 9.3 10.1 10.3 11.9
4.3 4.8 4.6
6.3
8.0 1.9
0.1 0.1
0.7
1.6
0.9
0.7 0.2
0.9
2.6
1.4
2.5 1.3
2.7
3.8
18.2 17.4
16.5
21.0
27.9
Q2'12 Q3'12 Q4'12 Q1'13 Q2'13
38.1 38.1
7.8
17.6 1.6
2.2
6.2
2.0 5.1
6.7 58.8
66.6
FY 11 FY 12
36.0% 35.9% 37.8% 36.1% 35.3%
37.4% 39.4%
No
n-I
nte
res
t In
co
me
| K
Dm
n(1
)
Fees & Commissions FX Income Dividend Security Gains Other Income Non-Interest Income
Non-Interest
Income(1) to
Revenues
(1)Q4 2012 excludes KD4.6m one off consolidation gains on BBT reported in Non Interest Income.
11
Strengthen/Diversify Balance Sheet
2,135 2,211 2,218 2,298 2,407
1,029 1,119
1,677 1,670
1,694 3,164
3,330
3,895 3,968
4,101
Q2'12 Q3'12 Q4'12 Q1'13 Q2'13
1,867 2,029 2,054 2,048 2,055
725
755
1,331 1,318 1,351 2,592
2,783
3,384 3,366 3,406
Q2'12 Q3'12 Q4'12 Q1'13 Q2'13
28.0%
27.1%
39.3% 39.1%
39.7%
Cu
sto
me
r L
oa
ns
| K
Dm
n
Cu
sto
me
r D
ep
os
its
| K
Dm
n
81.9% 83.6%
86.9% 84.8%
83.1%
32.5%
41.3%
International
Contribution
Loans to
Deposits
Kuwait International Customer Loans Kuwait International Customer Deposits
Customer loans and Customers deposits figures after consolidation adjustments.
12
…and effectively managed risk position
9.2% 8.8%
5.6% 5.6%
4.2%
Q2'12 Q3'12 Q4'12 Q1'13 Q2'13
NPA’s to Gross Facilities NPA’s net of collateral to Gross Facilities
4.0%
3.7%
1.8% 1.8% 1.9%
Q2'12 Q3'12 Q4'12 Q1'13 Q2'13
NPL KPIs
Indicators Q2’12 Q1’13 Q2’13
Gross Loans 2,697 3,484 3,536
NPL’s 254 258 188
NPL Ratio 9.4% 7.4% 5.3%
NPL, net of
collateral 2.8% 2.1% 2.1%
NPL Coverage, net
of collateral 139% 165% 175%
Non Performing Assets (KD million) and Coverage Ratio
349 341 267 277
206 153 143
86 90 92
184 188 194 202 226
120% 131% 226% 226%
246%
53% 55% 73% 73%
110%
Q2'12 Q3'12 Q4'12 Q1'13 Q2'13
NPA NPA net of collateral Total provisions Coverage net of collateral Coverage Ratio
Indicators Q2’12 Q1’13 Q2’13
Gross Loans 2,697 3,484 3,536
NPL’s 254 258 188
NPL Ratio 9.4% 7.4% 5.3%
NPL, net of
collateral 2.8% 2.1% 2.1%
NPL Coverage 41.2% 45.8% 69.1%
NPL Coverage, net
of collateral 139% 165% 175%
13
13.5 16.1
9.2
17.5 13.6
3.5 7.9
4.0
17.0 16.1 17.1 17.5 17.6
13.6 15.2
9.2
15.6 12.3
4.0 2.5 10.8
5.0 11.5 17.6 17.7
20.0 20.6
23.8
2011 Quarterly Net Profits 2012 Quarterly Net Profits 2013 Quarterly Net Profits
ROE(1) ROTE(1)
12.7% 13.8%
7.9%
13.4% 10.0%
3.9% 2.4%
9.9%
4.5% 10.0%
16.6% 16.2% 17.8% 17.9%
20.0%
Q2'12 Q3'12 Q4'12 Q1'13 Q2'13
21.0% 22.4%
12.5%
21.5%
15.6%
6.8% 4.0%
16.1%
7.5% 16.3%
27.7% 26.4%
28.6% 29.0% 31.9%
Q2'12 Q3'12 Q4'12 Q1'13 Q2'13
… with stable shareholder returns
(1) Quarterly ROE & ROTE are Annualized.
Quarterly Net Profit | KD million
Additional Provisions
Q2’11 Q2’12 Q3’11 Q3’12 Q4’11 Q4’12 Q1’12 Q1’13 Q2’12 Q2’13
Additional Provisions Additional Provisions
15 (1)Reported contribution excluding consolidated adjustments, with Sub Debt cost allocated to subsidiaries.
Net Profit contribution to BB Share; Q2 2013 Turkey Non Meaningful.
Burgan Bank Contribution Summary Q2’13(1)
49.3%
55.3%
45.7%
58.1%
60.1%
59.4%
8.9%
17.9%
17.9%
15.3%
15.0%
13.7%
25.9%
16.1%
14.5%
7.2%
7.1%
6.2%
0.2%
11.8%
9.8%
16.2%
11.5%
7.7%
6.7%
6.9%
7.8%
1.4%
6.9%
8.3%
3.8%
3.3%
1.9%
0.2%
2.2%
Net Profit^
OperatingProfit
Revenue
CustomerDeposits
CustomerLoans
Total Assets
Kuwait Jordan Algeria Turkey Iraq Tunisia
Diversification Benefits Burgan Balance
Sheet & P&L…
16
1,867
504
195
31 5
2,055
513
243
555
47 7
Kuwait Jordan Algeria Turkey Iraq Tunisia
Q2'12 Q2'13
2,135
569
224 167 67
2,407
633
298 404 324
78
Kuwait Jordan Algeria Turkey Iraq Tunisia
Q2'12 Q2'13
24
34
11 13 8
11 9 3 5 1 2
1 1
1
12
14
10
…with stable performance from all the
subsidiaries
Revenue | KD million Operating Profit | KD million
Net Loans(1) | KD million Customer Deposits(1) | KD million
Kuwait
Q2’13
Jordan Algeria Turkey Iraq Tunisia
Q2’12
Sub Debt Cost. Sub Debt Cost.
(1)Figures are reported before consolidation adjustments.
16
25
7 8 6 7
2 3 0.3 1.7
1 1
1
8 9
2
Kuwait
Q2’13
Jordan Algeria Turkey Iraq Tunisia
Q2’12
18
Burgan Bank Turkey Update
Integration Highlights
(1)Revenue excludes sub debt allocation.
(2)Total Provisions(General + Specific) to NPA’s net of collateral.
(3)Customer Loans growth in Local Currency.
RISK REVIEW: ► New credit architecture has been introduced.
► In process to upgrade market and liquidity risk
management capabilities.
► Actively participation in credit decision making.
► Ongoing process of reviewing & enhancing the
risk architecture | process.
► Alignment of Group Corporate Governance has
been completed, with functional reporting lines in
place and tested.
BUSINESS ENHANCEMENT: ► Started sessions to enhance business units
performance & building new business pipeline.
► Enhanced funding efficiency.
► Establishing an International Desk lead by Private
Banking; which would be servicing the interest of
Group cliental in Turkey.
► Co-lending with Burgan Bank Kuwait initiated.
► Supporting product building capabilities in the
Leasing & Securities subsidiaries.
1
2
Key Financial Metrics Q2’2013 | KD million
Total Assets KD 804 million
Customer Loans KD 555 million
Revenues(1) KD 10.1 million
Operating Profit(1) KD 1.6 million
Growth vs. Q1 2013
+10%
NPL Ratio 5.4%
NPL coverage, net
of collateral(2)
+8%
+15%(3)
+8%
+77%
Q1’13 Q2’13
5.5%
134% 108%
19
FIM Bank Update
Acquired Stake
Debt to Assets swap between Burgan Bank and Al Massaleh was executed on 20th June, 2013. Consequently, Burgan
Bank owning 24.49% shares in FIMBank.
UGB co-investment acquiring 12.56% shares of FIMBank from Al Massaleh on 20th June, 2013.
UGB and FIMBank convertible loan was granted on 27th June, conversion of the loan was completed on 29th July
2013.
Consequently, Burgan Bank and UGB combined ownership equal to 49.8%.
1
2
3
4
Business Model
FORFAITING
TRADE FINANCE
FACTORING
Geographic Footprint & Service Offering
UK
(LFC HQ)
Brazil
Russia
Egypt
Romania
Lebanon
India
USA Turkey
Singapore
Malta
(FIM HQ)
Dubai
Switzerland
20
FIM Bank Capabilities & Opportunities
FIM Bank
Capabilities &
Opportunities
Global
Network &
Presence
Diversification of
Risk
Unique
Business Model
EU
Operating
License
Successful
Product
Portfolio
Structured Trade
& Loan
Syndication
Factoring &
Fortaiting
Best in Class
22
Customer Deposits Growth | KD million Customer Loans Growth | KD million
ROTE(1)(2) | % Revenues Growth | %
2.1%
3.0%
7.1%
22.6%
31.4% 1
2
3
4
5
1
2
3
4
5
(6.3%)
7.7%
9.6%
26.7%
47.5% 1
2
3
4
5
1
2
3
4
5
Local Peers – Q2 2013 Ranking
(1)Burgan Bank ROTE exclude additional precautionary reserves.
(2)Annualized ROTE based on Open Equity.
5.2%
5.6%
8.1%
11.7%
31.9%
(3.4%)
(0.5%)
13.9%
29.6%
39.7%
23
Customer Deposits Growth | KD million Customer Loans Growth | KD million
ROTE(1)(2) | % Revenues Growth | %
2.0%
3.3%
9.7%
17.7%
22.6%
26.3%
31.4%
39.2%
Regional Peers – Q2 2013 Ranking
(1)Burgan Bank ROTE exclude additional precautionary reserves.
(2)Annualized ROTE based on Open Equity.
1
2
3
4
5
6
8
7
6.1%
14.2%
14.3%
15.6%
17.3%
29.6%
32.7%
39.7%
11.7%
13.7%
15.3%
15.8%
16.7%
18.3%
25.4%
31.9%
0.0%
2.2%
13.2%
16.8%
26.7%
33.6%
47.5%
51.4%
1
2
3
4
5
6
8
7
1
2
3
4
5
6
8
7
1
2
3
4
5
6
8
7
25
… In Summary
BUSINESS
PERFORMANCE
Solid Operating Performance with access &
exposure to high growth markets delivering resilient
underlying earnings
LIQUIDITY & CAPITAL Healthy Balance Sheet maintained growth YoY &
QoQ supported by International operations
performance with CAR at 17.6% & Tier 1 at 11.4%
ASSET QUALITY In Comfortable Levels, NPA ratio improved supported
by asset growth, better coverage and major declines in
NPA’s from Kuwait
REGAINING SPEED OF GROWTH RESULTING IN HIGH RETURNS &
SOLID OPERATING PERFORMANCE
28
Q3 2012 Q1 2013 Q4 2012 Q2 2013
Best Banking
CEO Kuwait 2013
Global Banking &
Finance Review
Best Banking
Group MENA
2013
Global Banking &
Finance Review
External Recognitions….
All awards mentioned above are the results of “peers & customers voting” process
organized by the publications.
Best Private Bank
in Kuwait Capital
Finance
International
Quality
Recognition
Award
JP Morgan Chase
Bank of the year
Tunisia
InterContinental
Finance Magazine
Deal of the Year
“ET Deal”
Acquisition
International
Best Bank in
Jordan for 2012
Global Banking &
Finance Review
Best Private
Banking offering
in Jordan 2012
Global Banking &
Finance Review
Best Co-branded
credit card in
Jordan 2012
Global Banking &
Finance Review
Best Bank in Iraq
2012
EMEA Finance
Best Banking
Group In Kuwait
World Finance
2013
Best Employee
Development in
GCC
World Finance
2013
Best Domestic
Retail Bank of Year
Asian Banking &
Finance Magazine
2013