Kuwait Times, Wed, Oct 30, 2024 | Rabi al-Thani 27, 1446
Burgan Bank reports KD 165m in revenue and KD 33m in net profit
Kuwait:
Burgan Bank Group (“Burgan” or “the Bank”)
announced its financial results for the nine-month period ended September 30,
2024 (9M 2024).
The Group reported KD 165 million in revenues for 9M 2024, improving by 5
percent y-o-y, compared to KD 157 million during the same period in 2023. The
increase in revenues was mainly driven by higher net-interest income of KD 112
million, up 23 percent y-o-y, while non-interest income remained solid at KD 53
million. The Group’s net interest margin also increased to 2.2 percent for the
current period as compared to 1.9 percent in 9M’23, improving by 30bps y-o-y.
Driven by higher revenues, the Group reported a solid net income of KD 33
million, compared to KD 30 million for the same period in 2023, marking a strong
growth of 10 percent y-o-y.
The Group delivered strong asset growth of 11 percent y-o-y in 9M 2024, reaching
KD 7.8 billion by the end of the period. The Group’s loan book grew by 6 percent
y-o-y, reaching KD 4.4 billion; primarily driven by its Kuwait operations.
Burgan’s deposit base also expanded by 14 percent y-o-y and stood at KD 5.0
billion by the end of 9M 2024.
The Group reported significant improvement in its asset quality metrics with
non-performing loan (NPL) ratio of 1.9 percent in 9M 2024 compared to 2.5
percent reported last quarter (6M 2024) – translating into on a sequential
(q-o-q) improvement of 60bps. Further, the Group’s provision coverage ratio was
also strong at 218 percent at the end of 9M 2024. The Group continues to
maintain solid and healthy capital levels, with Common Equity Tier 1 ratio
(CET1) of 12.9 percent, Tier I capital ratio of 15.2 percent and capital
adequacy ratio (CAR) of 19.0 percent, well above the regulatory requirements and
demonstrating sufficient capital buffers to support future growth.
Commenting on Burgan’s financial results, the Bank’s Chairman, Sheikh Abdullah
Nasser Al-Sabah, said: “During this year, we witnessed consistent
innovation-driven growth and development across core areas of Burgan Bank’s
operations, as we continue to push ahead with our evolution-focused strategy.
Our financial core remains strong and our foundations solid, as we carefully
balance risk with reward in pursuit of development. These past nine months have
seen us make considerable long-term investments across our entire business,
including fortifying our digital infrastructure and enhancing our digitally
smart solutions; further evolving our customer experience online and off;
expanding our tailored offerings to all segments of customers; and investing in
the growth, development and well-being of our human capital.”
The chairman further added: “Guided by our core vision to become the most
progressive and modern bank in Kuwait, we remain committed to offering
best-in-class financial services and tailored solutions that create sustainable,
long-term value for our customers, employees and shareholders, while adhering to
the global standards of Environmental, Social and Governance (ESG) practices.”
Affirming Burgan Bank’s strong financial core and stable standing, the Chairman
highlighted that the Bank has maintained high international standards in terms
of its creditworthiness. Within that vein, Standard & Poor’s Global Ratings
(S&P)affirmed the Bank’s long-term and short-term issuer credit ratings at
“BBB+/A-2” with a “stable” outlook, reflecting its expectations that Burgan’s
financial profile will remain broadly stable.
Redefining banking
excellence and innovation
Among the various areas that continued to set Burgan Bank apart is its
unwavering commitment to elevating the banking experience it offers to its
different Retail Banking customers and Private Banking clients. Commenting on
the results, Tony Daher, Group Chief Executive Officer at Burgan Bank, said:
“Three core facets of our ambitious business strategy include growing and
diversifying our corporate portfolio, building our wealth management and private
banking offering, and elevating the scope and quality of our retail banking
offerings. During these past nine months, we continued to build on solid
foundations, striving to achieve further sustainable progress with a
determination to continue strengthening our Kuwait business.”
As part of efforts to establish regional leadership and actively contribute to
Kuwait’s economic growth and development, Burgan Bank signed a memorandum of
understanding (MoU) with Korea Finance for Construction (KFINCO), making Burgan
the sole representing bank in Kuwait for the South Korean co-op institution, as
part of the latter’s strategic expansion across the Middle East. The partnership
agreement stipulates that Burgan Bank will be offering KFINCO fronting services,
whereby the Bank will represent the company in issuing project-related
guarantees on the back of their counter-guarantee.
Meanwhile, the Bank upheld its dedicated efforts to provide its Private Banking
customers with an exceptional banking experience by introducing its most
exclusive and prestigious invitations-only Visa credit card, which unlocks a
world of high-end services, luxury experiences, and unmatched benefits for
Burgan’s ultra-high-net-worth (UHNW) clients. More importantly, the Bank
expanded its Private Banking branch network to include the Al-Adailiya branch,
making it easier for all Private Banking clients to access and benefit from a
suite of exclusive banking services, tailored to their financial needs and
investment aspirations.
On another front, the Bank led the third quarter of the year by announcing the
launch of the instant payment service WAMD, which customers can access through
the Burgan Mobile application to send, receive, and request money transfers
easily, safely, and securely. The service comes as Burgan Bank forges ahead with
its digital transformation journey, fueled by a commitment to the Central Bank
of Kuwait’s (CBK) strategy for reducing cash transactions and encouraging
reliance on digital services.
Entwining business
growth with talent development
Another primary pillar of Burgan Bank’s continued success is its dedication to
developing its employees and investing in Kuwait’s top calibers and aspiring
talents, under the umbrella of its market-leading human capital development
strategy. On its mission to be an employer of choice, the Bank celebrated the
graduation of numerous talents from its suite of learning and talent development
programs in the third quarter of 2024, including “Entelaqah”, “Investment and
Wealth Management”, “Burgan Cares”, and the “Empower Her” summer internship
program.
In parallel, Burgan Bank launched its innovation and digital transformation
central hub, “Burgan Lab”, designed to foster a culture of collaboration,
creativity and excellence through workshops, training sessions and focus groups
all year long. Subsequently, the Bank introduced the first program under this
new hub, “Burgan Lab Academy”, in collaboration with CODED to empower fresh
graduates to become the next generation of tech leaders.
Furthermore, the Bank launched the 2024 edition of its flagship talent
development program, “Ro’ya”, and expanded its “Burgan Cares” program to support
employees interested in pursuing postgraduate studies.
Domestic
leadership, international recognition
During the third quarter of the year, several global institutions recognized
Burgan Bank for its robust financial standing, commitment to excellence and
adherence to the highest standards in banking, environmental advocacy, and human
capital development. Burgan Bank was awarded the prestigious Leadership in
Energy and Environmental Design- LEED v4.1 O+M: EB (Operations and Maintenance -
Existing Buildings) Gold Certification by the US Green Building Council (USGBC)
for operations and maintenance at its head office building in Kuwait City. This
achievement demonstrated the Bank’s commitment to sustainability, operational
excellence, and environmental stewardship while adhering to the highest
standards of ESG practices in banking.
The Bank also received the prestigious Brandon Hall Group Human Capital
Management (HCM) Gold Award of Excellence in the “Learning and Development” area
under the “Best Use of Social/Collaborative Learning” category. The award
acknowledged Burgan’s adoption of learning and development initiatives that
focus on unconventional social learning methods and adapt to the dynamic and
ever-evolving industry.
Lastly, Burgan ranked 35th on The Banker magazine’s list of Top 100 Arab Banks
in 2024, further affirming the Bank’s leading position on a regional level with
strong investor and customer confidence. This prestigious recognition also
confirmed the Bank’s robust financial strength and commitment to the highest
standards of governance and transparency.
Advancing together
Burgan Bank’s success in the first nine months of 2024 was also evident in its
consistent efforts to develop and advance its community under the umbrella of
its comprehensive social responsibility program. This included hosting the first
“Empower Her” seminar, which followed the great success of the namesake summer
internship program. The seminar, held under the auspices and sponsorship of
Sheikha Dana Nasser Sabah Al-Ahmad Al-Sabah, gathered a distinguished audience
including prominent figures in Kuwaiti banking and various sectors, creating a
space for sharing valuable market insights to empower women in leadership
positions across society.
The Chairman concluded his statement by thanking Burgan Bank’s Board of
Directors, Executive Management, shareholders, customers, and all employees
across every department for their dedication, loyalty, and notable contributions
to the Bank. He also affirmed Burgan’s commitment to the sustainable development
of its business operations across all departments with a sharpened focus on ESG.
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.