Ready to Spring. Investor Presentation. Monday 5th April, 2010

Transcription

1 Ready to Spring Investor Presentation Monday 5th April, 2010

2 Disclaimer 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. Various factors could cause future results, performance or events to differ materially from those given in this document. No obligation is undertaken to update this document or the statements / information contained in it. The information contained in this document should by no means be interpreted as an invitation to making any investment decision based on the same. Our continuous advice is that every investor must rely on his/her own advisor and resources to ensure the correctness of the information presented to him/her and then makes his/her investment decision accordingly. 2

3 Mission & Vision Our Vision To be the best of class financial service provider in the MENA region through sustained execution of best practice, innovation and reliable stakeholder care. Our Mission Burgan Bank is your financial partner, forming a relationship with you based on integrity and trust, providing innovative banking services that understand and support your different needs at every stage of life. Our Goals To maximize value for all our stakeholders, clients, personnel and shareholders by building on Burgan Bank s three pillars of client delight and care, leveraging its operational and technological capabilities and nurturing our staff. Our stake holder's value must be consistent, growth oriented and accomplished in the spirit of the corporate governance framework. 3 3

4 Contents Financial Review 2009 & strengths Activities & Strategy Outlook 2010 Conclusion 4

5 Financial Review 2009 & Strengths Balance Sheet Loans & Advances Customer Deposits KD Millions Burgan Bank Group CAGR 24.5% KD Millions Burgan Bank Group CAGR 18.3% KD Millions Local Industry except Burgan Bank CAGR 20.0% KD Millions Local Industry except Burgan Bank CAGR 14.6% *note: the numerical data provided on this page is rounded up to the nearest digit. 5

6 Financial Financial Review Review: & Strengths Profit & Loss Operating Profit Net Profit KD Millions Burgan Bank Group CAGR 24.9% KD Millions Burgan Bank Group CAGR -26.8% KD Millions Local Industry except Burgan Bank CAGR 11.5% KD Millions Local Industry except Burgan Bank CAGR -2.9% *note: the numerical data provided on this page is rounded up to the nearest digit. 6

7 Financial Review 2009 & Strengths NPL s to Loans Burgan Bank Group Provision Coverage Burgan Bank Group Local Industry except Burgan Bank Local Industry except Burgan Bank 7

8 Share Price Performance January 2009 to December 2009 General Index : 3% up Banking Index : 3% up BB Share Price : 17% down* * Share price without adjustment for Bonus Issue 8

9 Financial Review 2009 & Strengths Capital Adequacy Ratio of 16.86%. Further strengthening with completion of Rights Issue of KWD 100 million. Sound Liquidity with 10% of total assets in T Bills & Bonds. Investments account for only around 3% of total assets. Under stress Investment company exposure represents less than 4 % of total credit exposure. Periodic stress testing of loan portfolio undertaken since early 2008 to anticipate potential problems. Prudential aggressive Provision Coverage; Total provision of KWD 179 m, out of which about half in general provisions Year Total Assets (in KD Millions) 1,739 1,890 2,210 2,848 3,943 4,094 Return On Assets 1.60% 2.30% 2.70% 3.00% 1.10% 0.20% Return On Equity 13.70% 18.10% 22.00% 24.50% 11.20% 2.00% Capital Adequacy Ratio 17.80% 18.40% 16.50% 16.50% 13.80% 16.90% (Minimum 12% required by Central Bank of Kuwait) *Full compliance with Basel II standardized approach since December

10 Financial Review 2009 & Strengths Achievements All branches renovated and upgraded. 117 branches as on 31 December ATMs as on 31 December Introduction of Cash Management System. Implementation of Customer Relationship Management System. 10

11 Contents Financial Review 2009 & strengths Activities & Strategy Outlook 2010 Conclusion 11

12 Activities & Strategy Burgan Bank Subsidiaries Equity: 47 Equity: 28 Equity: 113 Equity: 24 Assets: 179 Assets: 195 Assets: 864 Assets: 141 Revenue: 18 Revenue: 8 Revenue: 49 Revenue: 9 Net profit: 6 Net profit: 4 Net profit : 19 Net Profit: 4 ROE: 18.9% ROE: 17.6% ROE: 18.3% ROE: 17.0% Branches: 13 Branches: 32 Branches: 51 Branches: 3 15,000+ retail clients 80,000+ retail clients 100,000+ retail clients Acquired: April 09 Acquired: April 09 Acquired: July 08 Deal under consideration 2009 Financials in KD Millions *note: the numerical data provided on this page is rounded up to the nearest digit. 12

13 Activities & Strategy Integration of Subsidiaries after Acquisition Working closely with Internationally well known consultants. Integration to be in three waves; Wave 1: Risk Mgmt., Accounts / MIS, Treasury, Internal Audit & Corp. Communications: Completed. Wave 2: IT, Human Resources & Operations : In progress. Wave 3: Other Business Related Synergies. Steering Committee represented by the head of each bank to oversee the process and take decisions. 13

14 Activities & Strategy Rights Issue Time Table 1. Share Capital increase approved by share holders by KWD 36 million by issuing 360 million shares at a premium of fils, on the 11 th of January Central Bank of Kuwait approval received on 10 th December Amiri decree issued on 23 rd March Proposed cut-off date 12 th April Proposed subscription period for share holders : 13 th April 2010 to 27 th April Proposed subscription period for public for unsubscribed shares : 2 nd May 2010 to 15 th June

15 Activities & Strategy Long range plan Presently, Burgan Bank is committed through its Long Range Plan ( ) to: Increase its market share and revenues from its client facing business with a major focus on Retail Banking and Private Banking. Significantly expand the Bank s market presence and footprint through the introduction of new products and substantially increase international trade and financing activities. Create a regional platform and widen the scope of banking activities through its affiliation and acquisition of banks in the MENA region. 15

16 Contents Financial Review 2009 & strengths Activities & Strategy Outlook 2010 Conclusion 16

17 Outlook 2010 Government support to economy & fiscal actions will be key determinants of the dynamics of the banking sector. International economic developments. The acquisitions are in fast growing economies, isolated from global economic trend, will strengthen the position of the bank. 17

18 Outlook 2010 Continued Group core operating income expected to grow further. Reduction expected in NPAs and increase in provision coverage. Group net profit guidance: Expected substantial increase. Investment portfolio constitute around 3% of total balance sheet size, given the minimal trading portfolio, Burgan Bank is well insulated from further market volatility. 18

19 Contents Financial Review 2009 & strengths Activities & Strategy Outlook 2010 Conclusion 19

20 Conclusion In the context of solid macroeconomics of the region, future strong development with MENA wide diversification leading to substantial enhancement of both franchise and shareholder value. Based on core competence, adapting best practices, committed to established corporate values and sound corporate governance. Robust and enterprising support from the major shareholder. Diversification of risks and sustainable sources of income. Additional financial strength through voluntary general provisions and retained earnings. Short-term returns in abeyance for long-term return. Zero dilution of capital & Attractive valuation price. 20

21 thank you Burgan Bank, P.O. Box 5389, Al Safat 12170, State of Kuwait Kuwait. Telephone: Fax