INVESTOR PRESENTATION...INVESTOR PRESENTATION Q1 2013 2 The information contained in this document...

1

INVESTOR

PRESENTATION Q1 2013

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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.

Disclaimer

3

Agenda

Conclusion

Financial Performance

Appendix

Q1 2013: Key Highlights

Economic Overview

4

Economic Overview

5

0 2 4 6 8 10 12

Turkey

MENA

China

India

Russia

Brazil

Japan

EU

United States avg 2011-2018

avg 2000-2008

Lower growth ahead, debt and

unemployment remain high….

MENAT MACRO

Global Macro: weak fundamentals, below-potential growth prospects, high debt,

unemployment level and political risk

KUWAIT MACRO

Growth: 3.6% (2013). 5-year plan execution is still lagging . The oil sector grew by 14% & the non-

oil sector at 0.9%.

Inflation expected at 4% (2013): Debt relief program for borrowers could bring about moral

hazard.

(1) Source IMF 2013 Data base.

Effective structural reforms is needed to build a dynamic and inclusive economies that generate

the vast number of jobs needed

Key components of success are promoting private-sector growth & international trade, as well as

attracting foreign direct investment inflows

-

2

4

6

8

10

12

14

2010 2011 2012 2013 2014 2015 2016 2017 2018

Unemployment rate (%)

Japan US EU MENA

-

50

100

150

200

250

300

2010 2011 2012 2013 2014 2015 2016 2017 2018

Gross public debt (% GDP)

Japan US EU MENA

Deb

t le

ve

l o

n t

he

ris

e..

(1)

Un

em

plo

ym

en

t re

ma

ins

hig

h..

(1)

Lo

we

r g

row

th p

ros

pec

ts..

(1)

MENA

MENA MENA

%

“ Low investment & credit demand levels undermining Inclusive Growth prospects in the region”

6


7

Revenue 9.8% 12.9%(1)|31.4%


STRONG GROWTH IN REVENUE & UNDERLYING NET INCOME WITH

HIGH QUALITY OF EARNINGS

MAINTAINED NIM ON QOQ BASIS DESPITE CENTRAL BANK OF

KUWAIT DISCOUNT RATE CUT

CONSISTENTLY HIGH RETURN RATIOS WITH NET INCOME

REACHING KD15.6M (KD20.6M AFTER EXCLUDING KD5M

ADDITIONAL PROVISIONS)

STABLE ASSET QUALITY

WITH HEALTHY NPL RATIO & COVERAGE RATIO

ROBUST YOY GROWTH IN BALANCE SHEET

OPTIMIZING BALANCE SHEET WITH SOUND LIQUIDITY

LEVELS

Q1’12 Q1’13

NPL, net of

Collateral 2.8% 1.7%(1)|2.1%

Loan

Growth 12.1% 18.6%(1)|39.9%

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

ROE(2) 16.6% 17.9%

NIM % 2.6% 2.5%

Deposit

Growth 18.8% 15.9%(1)|30.5%

Liquidity

Ratio 39.1% 32.5%

Coverage

ratio 145% 189%(1)|165%

(1)Excluding BBT Contribution & subdebt cost to Burgan Bank Consolidation figures.

(2)ROE adjusted for additional provisions of KD5m in Q1 2013.

NPLs / Gross

Loans 10.6% 7.8%(1)|7.4%

8


9

5.0 4.5 6.4

2.9 2.3

4.0 2.5

10.8

5.0

5.0

8.5 8.9

13.7

7.3

Q1'12 Q2'12 Q3'12 Q4'12 Q1'13

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 Q1 12 Q1 13

Revenue Growth (YoY) 9.8% 12.9%(2)|31.4%

Operating Profit Growth (YoY) 15.4% 14.3%(2)|12.4%

Cost to Income Ratio 37.7% 36.9%(2)|46.8%

Jaws Ratio (YoY) 8.1% 2.3%(2)|(31.5%)

Loans to Cust. Deposits 79.1% 81.0%(2)|84.8%

Liquidity Ratio 39.1% 35.1%(2)|32.6%

NPL to Gross Loans 10.6% 7.8%(2)

|7.4%

NPL net of Collateral to Gross Loans 2.8% 1.7%(2)

|2.1%

ROE | ROE ex. Additional Provisions 16.6%|16.6% 13.4%|17.9%

ROTE | ROTE ex. Additional Provisions 28.1%|28.1% 21.5%|29.0%

42.6

48.1 48.2 51.2

56.0

Q1'12 Q2'12 Q3'12 Q4'12 Q1'13

(1)Figures are reported after consolidation adjustments,

(2)Excl. BBT contribution in Q1’13

(3)Liquid assets comprises of Cash & Cash eq., Treasury bills & bonds and Due from Banks & OFIs.

Note: CQGR ~ Compunded Quarterly Growth Rate

17.5

13.6 15.2

9.2

15.6

4.0 2.5

10.8

5.0 17.5 17.6 17.7

20.0 20.6

Q1'12 Q2'12 Q3'12 Q4'12 Q1'13

∆ 17.6%

Gross Loans in KD million. Additional Provisions

Additional Provisions

2,507 3,484

∆ 31.4%

10

2.6% 2.6% 2.6% 2.2%

2.5%

Q1'12 Q2'12 Q3'12 Q4'12 Q1'13

(1)Q4 2012 includes KD4.6m one off consolidation gains on BBT reported in Non Interest Income.

(2)Net interest income divided by end of period interest earning assets i.e. cash, t-bills and bonds,

due from banks and OFIs, loans and advances to customers, investment securities.

…with quality earnings…

0.3%

2.5%

Due to consolidation of BBT’s balance sheet only

NIM | %(2)

Revenue mix | KD million(1)

26 29 27 24

13 14 17

15

Q1'11 Q2'11 Q3'11 Q4'11

Net Interest Income Non Interest Income

28 30 31 30 35

15 18 17 21

21

Q1'12 Q2'12 Q3'12 Q4'12 Q1'13

Net Interest Income Non Interest Income

39 43 43 48 44 48 39 51 56

BB Consolidated (KD mn)

FX Income 30%

Dividend 3%

Security Gains

5%

Fees & Comm.

49%

Other Income 13%

Non-Interest Income mix | %

15

28

Q1’12

43

11

3.0

4.0

4.8

6.1

Q1'12 Q2'12 Q3'12 Q4'12 Q1'13

Deposits Total Liabilities

∆ 27.4%

∆ 30.5%

2.4

3.4

4.8

6.1

Q1'12 Q2'12 Q3'12 Q4'12 Q1'13

Loans & Advances Total Assets

Assets Progression | KD billion

Liabilities Progression | KD billion

CQGR 8.8%

CQGR 6.2%

CQGR 6.2%

CQGR 6.9%

…supported by solid balance sheet growth…

Loans to Customer Deposits | KD billion

2.4

2.6 2.8 3.4

3.4 3.0

3.2 3.3 3.9

4.0

79.1%

81.9%

83.6%

86.9%

84.8%

Q1'12 Q2'12 Q3'12 Q4'12 Q1'13

Loans Deposits Loan/Deposit Ratio

Note: CQGR ~ Compunded Quarterly Growth Rate.

∆ 27.4%

∆ 39.9%

Liquid Assets 33%

Loans & Advances

55%

Investments 5%

Others 7%

12

…and effectively managed risk position

266 254 253 247 258

70 76 72 67 72 102 105 111 114 118

145% 139% 154%

171% 165%

Q1'12 Q2'12 Q3'12 Q4'12 Q1'13

NPL NPL net of collateral Total provisions Coverage net of collateral

10.6%

9.4% 8.8%

7.1% 7.4%

Q1'12 Q2'12 Q3'12 Q4'12 Q1'13

NPLs to Gross Loans | % NPLs net of collateral to Gross Loans

2.8% 2.8%

2.5%

1.9% 2.1%

Q1'12 Q2'12 Q3'12 Q4'12 Q1'13

NPA KPIs

Indicators Q1’12 Q4’12 Q1’13

Gross Credit

Facilities 3,568 4,784 4,937

NPAs 344 267 277

NPA Ratio 9.6% 5.6% 5.6%

NPA, net of

collateral 3.6% 1.8% 1.8%

NPA Coverage, net

of collateral 137% 226% 226%

Non Performing Loans (KD million) and Coverage Ratio

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ROE(1) ROTE(1)

16.6%

12.7% 13.8% 13.4%

3.9% 2.4% 4.5%

16.6% 16.6% 16.2%

17.8%

17.9%

Q1'12 Q2'12 Q3'12 Q4'12 Q1'13

28.1%

21.0% 22.4% 21.5%

6.8% 4.0% 7.5%

28.1% 27.7% 26.4%

28.6%

29.0%

Q1'12 Q2'12 Q3'12 Q4'12 Q1'13

… with solid & stable shareholder returns

(1) Quarterly ROE & ROTE are Annualized.

Additional Provisions Additional Provisions

17.5

13.6

9.2

4.0 2.5 10.8

5.0 17.5 17.6 17.7

20.0 20.6

Q1'12 Q2'12 Q3'12 Q4'12 Q1'13

2011 Quarterly Net Profits 2012 Quarterly Net Profits 2013 Quarterly Net Profits

11.8 13.5

16.1

9.2

4.6 3.5

7.9

16.4 17.0 16.1

17.1

Q1'11 Q2'11 Q3'11 Q4'11

Quarterly Net Profit | KD million

Additional Provisions

9.9%

7.9%

16.1%

12.5%

17.5

Q1’12

15.6 15.2

14


- By Country

15

Strong diversity of operation…

Diversification strategy is working with Good balance in Balance sheet & P&L

(1)Reported contribution excluding consolidated adjustments, with Sub Debt cost allocated to subsidiaries.

Net Profit contribution to BB Share; Q1 2013 Turkey & Tunisia Non Meaningful.

* Operating Profit contribution from Turkey in Q1 2013 Non Meaningful.

Note: BBT incurred One off Rebranding Expenses in Q1 2013.

Burgan Bank Contribution Summary Q1’13(1)

67.0%

47.3%

41.3%

57.9%

60.7%

60.8%

1.7%

18.7%

17.7%

15.4%

15.6%

14.5%

25.8%

24.7%

17.8%

7.1%

7.3%

6.4%

14.0%

11.2%

15.2%

11.3%

5.5%

8.1%

7.4%

6.5%

1.1%

4.9%

1.2%

1.8%

1.8%

0.2%

2.1%

Net Profit^

OperatingProfit*

Revenue

CustomerDeposits

CustomerLoans

Total Assets

Kuwait Jordan Algeria Turkey Iraq Tunisia

16

3,433

906

299 206 139

3,927

937

412 728

318 136


Q1'12 Q1'13

1,696

496

185 33 6

2,048

525

245 512

38

6


Q1'12 Q1'13

2,013

597

200 163 67

2,298

613

282 445

257 73


Q1'12 Q1'13

9 10

8 10

8 3 4

1 1

1 1 1

22.6 23.4

10.0 11.0

9.4

6 6

6

8

(1)

2 3

0 1

1 1

1

14.7 14.8

6.6 7.2

0.9

…with stable performance from all the

subsidiaries

Revenue | KD million Operating Profit | KD million

Net Loans | KD million Customer Deposits | KD million Total Assets | KD million

Burgan Bank group registered

stable growth across subsidiaries

despite weak economic

environment

With new business origination to

be exploit through Burgan Bank

Turkey

Kuwait

Q1’13

Jordan Algeria Turkey Iraq Tunisia

Q1’12

Kuwait

Q1’13

Jordan Algeria Turkey Iraq Tunisia

Q1’12

Sub Debt Cost. Sub Debt Cost.

Note: BBT incurred One off Rebranding Expenses in Q1 2013

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Conclusion

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… In Summary

Resilient

Business

Model

Stable Risk

Position

“CONSISTENT STORY LINE SUPPORTED BY STRONG

UNDERLYING PERFORMANCE”

SOLID OPERATING PERFORMANCE

CONSISTENT UNDERLYING RETURNS & NET PROFITS

STABLE ASSET QUALITY & COVERAGE RATIO

WITH LIQUIDITY AT COMFORTABLE LEVELS

International

Operations

NEW BUSINESS ORIGINATION CAPABILITIES & ACCESS TO NEW

MARKET/CLIENTS

DIVERSIFICATION STRATEGY PAYING OFF; WITH INTERNATIONAL

CONTRIBUTING 39.2% IN TOTAL ASSETS & 58.7% IN REVENUES

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Thank You

20

Appendix

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Performance vs. Peers

22

(3.5%) (37.9%)

7.7%

133.7%

(10.9%)

3.8% 28.5%

0.4%

NBK ABK GBK CBK Burgan

17.6%

21.0%

5.6% 7.3%

0.6%

29.0%

(1.1%) (8.8%) (11.6%)

8.1%

12.9%

11.2%

18.5%

10.1%


31.4%

16.3%

(8.0%)

1.6% 1.1% 15.9%

20.6% 14.6%


36.9%

30.5%

….. Local Peers (Q1'13 Vs. Q1'12)

5.0%

(0.4%)

3.8% 0.6%

18.6% 15.9%

21.3% 21.0%

39.9%


27.2% 22.7%

26.4% 30.1%

32.5% 27.7%

35.1%


(0.5%)

(2.6%)


(2)Burgan Bank Q1 2013 adjusted for additional provisions of KD5m.

Net Profit Growth Q1'13(2) vs. Q1'12

Liquidity Ratio(1) Net Loans Growth Q1'13 vs. Q1'12 Deposits Growth Q1'13 vs. Q1'12

Revenue Growth Q1'13 vs. Q1'12 ROTE(2)

81.3 7.1 7.9 0.8 20.6(2)

Q1 2013 KD million.

Impact of Boubyan Bank(Islamic) Consolidation on NBK. Impact of Burgan Bank Turkey Consolidation on Burgan Bank. Impact on Burgan Bank Q1 2013 Net Profit after excluding KD5m additional provisions.

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(3.5%)

2.3%

12.2%

7.3% 6.7%

(8.7%) (10.9%)

3.9%

28.5%

0.4%

17.6%

NBK Blom AUB CBQ QNB AUDI BB

21.0%

17.5% 19.8%

14.2%

19.6%

14.8%

29.0%


….. Regional Peers (Q1’13 Vs. Q1’12)

Net Profit Growth Q1'13(2) vs. Q1'12

Liquidity Ratio(1)

27.2%

32.5%

(0.5%)

(2.6%)

27.7%

35.6%

26.2%

18.7%

14.0%

30.5%

35.1%


5.0% 0.5% 2.0%

21.8%

28.7% 30.7%

18.6% 15.9%

21.3%

21.0%

39.9%

Column5 Column2 Column3 Column6 Column7 Column8 Column9

Net Loans Growth Q1'13 vs. Q1'12 Deposits Growth Q1'13 vs. Q1'12

16.3% 0.0%

19.3% 22.0%

28.2%

17.8%

15.9%

20.6% 14.6%

36.9%

30.5%

NBK Blom AUB CBQ QNB Audi BB

(1.1%) (5.1%)

11.2% 10.7%

4.5%

(4.4%)

12.9%

11.2%

18.5%

10.1%

31.4%


Revenue Growth Q1'13 vs. Q1'12 ROTE(2)


(2)Burgan Bank Q1 2013 adjusted for additional provisions of KD5m.

Note: Banque Saudi Fransi Q1 2013 filing were unavailable.

Impact of Boubyan Bank(Islamic) Consolidation on NBK. Impact of Burgan Bank Turkey Consolidation on Burgan Bank. Impact on Burgan Bank Q1 2013 Net Profit after excluding KD5m additional provisions.

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