Bur­gan Bank Group an­nounces net in­come of KD 65.2m for 2017

Board of Direc­tors rec­om­mends 7% in cash div­i­dends and 5% in bonus shares

Kuwait Times - - Business -

KUWAIT: Bur­gan Bank Group an­nounced yes­ter­day its full year 2017 earn­ings. The set of re­sults for the pe­riod end­ing in 31st De­cem­ber 2017 re­flected Bur­gan Bank’s con­tin­u­ous fo­cus on max­i­miz­ing re­turns for share­hold­ers, de­liv­er­ing high qual­ity earn­ings, op­er­at­ing ef­fi­cien­cies, and to fur­ther im­prove as­set qual­ity and risk profile. Re­ported net in­come for the year 2017 reached KD65.2 mil­lion ($214.9 mil­lion). Earn­ings per share reached 25.4 fils.

On un­der­ly­ing bases, Bur­gan Bank net in­come (ex­clud­ing pre­cau­tion­ary pro­vi­sions & after AT1 cost) reached KD76.2 mil­lion ($251.4 mil­lion) and re­turn on tan­gi­ble eq­uity (ROTE) reached 12.5 per­cent for full year 2017. The Board of Direc­tors rec­om­mends a pay-out of 7 per­cent in cash div­i­dends and 5 per­cent in bonus shares.

In 2017, Op­er­at­ing in­come grew by 2 per­cent year- onyear to reach KD239.4 mil­lion ($789.8 mil­lion). Op­er­at­ing ef­fi­ciency con­tin­ued to im­prove with op­er­at­ing ex­pense de­clin­ing by 4 per­cent to reach KD109.2 mil­lion ($360.2 mil­lion). The high qual­ity earn­ings clubbed with across the board ef­fi­cien­cies, en­abled the bank to grew its op­er­at­ing profit by 8 per­cent year-on- year to reach KD130.2 mil­lion ($429.5 mil­lion). As­set qual­ity reg­is­tered sig­nif­i­cant im­prove­ment with Non-per­form­ing loans (NPL) ra­tio de­clined to reach 2.7 per­cent with Cover­age ra­tio of 155 per­cent and a lower cost of credit that reached 0.9 per­cent.

Dur­ing the same pe­riod, loans and ad­vances grew by 4.3 per­cent year on year to reach KD4.4 bil­lion ($14.6 bil­lion) and cus­tomers de­posits grew by 11 per­cent to reach KD4.2 bil­lion ($13.8 bil­lion).

Ma­jed Essa Al-Ajeel, Chair­man of Bur­gan Bank Group said: “the ex­ec­u­tive man­age­ment team has made sig­nif­i­cant progress on key ini­tia­tives to im­prove the bank cap­i­tal uti­liza­tion, risk profile and op­er­at­ing ef­fi­cien­cies amid chal­leng­ing op­er­at­ing en­vi­ron­ment. The bank man­aged to grow loans yearonyear by 4.3 per­cent while re­duc­ing risk weighted as­sets (RWAs) - after ex­clud­ing real es­tate col­lat­eral phase out im­pact. As­set qual­ity im­proved sig­nif­i­cantly as NPL ra­tio reached 2.7 per­cent for the group and 1.8 per­cent for Kuwait op­er­a­tions stand alone. Group Cap­i­tal Ad­e­quacy ra­tio stands at 16.2 per­cent as of De­cem­ber 31, 2017. Also, the bank has in­vested heav­ily in its con­trol ar­eas to fur­ther strength­ened it risk man­age­ment ca­pa­bil­i­ties”

“The strength of our op­er­at­ing ca­pa­bil­i­ties is yield­ing good per­for­mance re­flected in the high qual­ity earn­ings in 2017 with less de­pen­dency on one-offs,” con­tin­ued Al-Ajeel.

“All our sub­sidiaries are grow­ing, prof­itable and well cap­i­tal­ized. In­ter­na­tional Op­er­a­tions con­tin­ued to grow and now con­tribut­ing 45 per­cent of the Group’s op­er­at­ing in­come. Bur­gan Bank Group’s key fi­nan­cial in­di­ca­tors con­tinue to point in the right di­rec­tion,” added Al-Ajeel.

“On be­half of the board, I take this op­por­tu­nity to thank our cus­tomers and share­hold­ers for their con­fi­dence in our ca­pa­bil­i­ties and our reg­u­la­tors; the Cen­tral Bank of Kuwait, for their sup­port. I would also like to thank our ex­ec­u­tive man­age­ment team for their lead­er­ship and the excellent ex­e­cu­tion of the cor­po­rate strat­egy, and to our staff for their con­tin­ued sup­port and com­mit­ment,” con­cluded Al-Ajeel.

The con­sol­i­dated fi­nan­cials en­com­pass the re­sults of the Group’s op­er­a­tions in Kuwait, and its share from its re­gional sub­sidiaries, namely Bur­gan Bank - Turkey, Gulf Bank Al­ge­ria, Bank of Bagh­dad, Tu­nis In­ter­na­tional Bank. Bur­gan Bank Group has one of the largest re­gional branch net­works with more than 170 branches across Kuwait, Turkey, Al­ge­ria, Iraq, Tu­nis, Le­banon and rep­re­sen­ta­tive of­fice in Dubai-United Arab Emi­rates.

Im­proved yields and op­er­at­ing ef­fi­cien­cies

Ma­jed Essa Al-Ajeel

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