Burgan Bank (“Burgan” or “the Bank”) announced its financial results for the first half of 2023 (H1’23), for the period ending June 30, 2023.
The Bank reported robust Revenue of KD 108 million during H1’23 which was up 8% year-on-year (y-o-y). Higher revenues were driven by a strong Non-Interest Income of KD 47 million (+28% y-o-y) and Net-Interest Income of KD 61 million (vs KD 63 million in H1’22). The Net interest Margins (NIM) were almost flat at 1.9% in H1’23, as compared to 2.0% in H1’22; while the Cross-Sell Ratio improved from 37% in H1’22 to 44% in H1’23 (+680bps), due to higher fee and commission-based income supported by recoveries.
The Operating Expenses stood at KD 54 million in H1’23 as compared to KD 46 million in H1’22. The marginal y-o-y increase in expenses was largely attributable to higher staff expenses amongst others, and mainly in Kuwait and Turkey. Consequently, the Bank reported stable Operating Profits of KD 54 million during H1’23 (H1’22: KD 54 million). The Bank’s Credit Costs were higher in H1’23 at 90bps, comparable to 30bps in H1’22, however the impacts from the net monetary losses were lower at KD 7 million, compared to KD 11 million in H1’22.
As a result, the Bank reported a Net Income of KD 18 million for the first half of 2023. For accurate comparison, the above H1’22 financial figures have been adjusted for Bank of Baghdad’s (BoB) contributions, as it was sold in February 2023 and these contributions are not part of H1’23 financials.
Burgan maintained its strong asset quality during H1’23 with a Non-performing Loan (NPL) ratio of 2% and a Provision Coverage of 216%. Moreover, the Bank’s capital metrics remained solid with a higher Common Equity Tier 1 (CET1) ratio of 11.5%, Tier I capital ratio of 14.1% and a Capital Adequacy Ratio (CAR) of 17.8%.
Commenting on Burgan’s H1 results, the Bank’s Chairman, Sheikh Abdullah Nasser Al-Sabah, said: “The Bank's financial results for the first six months of 2023 signify a stable performance, bolstered by a strong foundation as we continue pursuing excellence and innovation in the banking sector. From this standpoint, we remain persistent in implementing the Bank's proactive long-term strategy, which is crucial in supporting our sustainable growth ambitions, fortifying our competitiveness, and driving shareholder value.”
The Chairman added: “What we’re conveying is a renewed commitment to positioning ourselves as a top Bank in Kuwait; delivering a superior customer experience, growing our human capital, achieving key environmental, social and governance (ESG) commitments, and investing heavily in digitalization. Speaking of human capital, we are pleased to report that our Kuwaitization employment percentage was 82% at the end of June 2023.”
Moreover, the Chairman highlighted that Burgan continued to receive recognition for its creditworthiness during the second quarter of 2023, which is a clear indication of the Bank’s solid financial core and its stable standing. He noted that Capital Intelligence (CI) affirmed the Long-term Foreign Currency and the Short-term Foreign Currency ratings of Burgan at “A+” and “A1”, respectively. At the same time, CI also confirmed Burgan’s Standalone Rating at “bbb+”, Core Financial Strength at “bbb+”, and Extraordinary Support Level as “High”.
As a further testament to investor confidence in Burgan’s overall credit profile, the Bank successfully closed the syndication for its global USD 800 million unsecured term loan facility due to strong demand from international and regional partners. “Completing a landmark syndication with commitments exceeding the proposed issue size reflects the trust of international markets in Burgan’s brand and, by extension, the Kuwaiti banking system,” the Chairman said, highlighting that this transaction will strengthen Burgan’s bank sheet, further diversify its funding sources, and safeguard against unforeseen risks and fluctuations.
Burgan Bank remains steadfast in employing the latest innovative banking practices and cutting-edge technologies centered around the ongoing and constant evolution of digital transformation. In this regard, the Bank has been striving to help serve customers better and faster to address their modern needs, working toward providing the ultimate streamlined banking experience. As an illustration, Burgan announced, during Q2’23, that all customers may easily open its Al-Rateb Salary Account and Kanz Account in just less than a minute using the Burgan Bank Mobile Application.
In addition to striving to provide a seamless banking experience, Burgan Bank continues to seek out innovative ways to reward its loyal customers and offer the best banking products, services and benefits that suit their daily lifestyles.
Accordingly, the Bank launched a new series of Cashback cards featuring the highest cashback rate in the Kuwaiti market, up to 15%, and a wide range of benefits designed for customer convenience. In the same vein, the Bank revamped its Kanz Draw Account to reward its customers and maximize their chances of winning valuable and life-transforming prizes. The remodeled draw account prizes grant customers an exclusive opportunity to win KD 2,000 in the monthly draw and KD 500,000 in the semi-annual draw, while the annual draw awards one lucky winner with the grand prize of KD 1,500,000.
Concluding his statement, the Chairman thanked Burgan Bank’s Board of Directors, Executive Management, shareholders, customers, and all employees across every department for their invaluable contributions to drive the Bank forward and help it achieve sustainable growth.
It serves to note that the consolidated financials for Burgan include the results of the Group’s operations in Kuwait, as well as its share of results from its subsidiaries, namely: Burgan Bank Turkey, Gulf Bank Algeria, and Tunis International Bank. Through this regional reach, Burgan Bank has one of the largest regional branch networks across Kuwait, Turkey, Algeria, Tunisia and a representative office in the United Arab Emirates.
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