Burgan Bank K.P.S.C. (Burgan or Group) declared its Full Year 2019 financial results today. Burgans FY19 Net Income grew to KD 84.7mn (up 3% y-o-y), thereby generating shareholders returns of 10%. The robust numbers replicate focus on producing high quality earnings, accomplishing working efficiencies, enhancing asset quality with clear aim of maximizing shareholders returns.

Given this strong performance, Burgan Board of Directors has proposed cash dividend of 12 fils per share, subject to shareholders approval at Annual General Meeting.

For FY19, the Group reported total Revenues of KD 248.2mn due to its ability to maintain stable Net Interest margins (NIMs) of 2.7% and generate robust levels of non-interest income (at 33% of revenues in FY19 as compared to 31% in FY18). During FY19, Burgans Cost to Income ratio elevated by 90bps driven by lower working costs.

Burgans asset quality similarly accelerated with NPL ratio of 2.5% in FY19 (20bps reduction y-o-y), while its Coverage Ratio similarly reinforced to 200% (as compared to 168% in FY18). The credit charges for the year also increased to 110bps (as compared to 140bps in FY18).

In FY19, Burgan grew its loan book by 1%, reflecting a cautious growth strategy in the subsidiaries market while focusing on its core market (Kuwait) where the loan book grew by 8%. In FY19 Burgans customer deposits grew by 6% adding further diversification in its funding base.

In FY19, Burgan stated Common Equity Tier 1 ratio (CET1) of 11.5% and Capital Adequacy Ratio (CAR) of 16.8% indicating adequate capital buffers for the business.

Commenting on these results Mr. Majed Essa Al Ajeel, Chairman of Burgan Bank group K.P.S.C. said: Burgans strong set of FY19 results but once more proves the strength of our operating capabilities and prudent risk management. This approach helps us generate constant shareholders returns while retaining sound risk appetite

During 2019, one of the Groups major achievements was the successful issuance of USD 500mn Tier 1 capital securities. The issuance was very well obtained by the international investor community and the robust subscription levels and attractive pricing demonstrated robust investor confidence in Burgan stated Mr. Ajeel

Mr. Ajeel concluded "On behalf of the board, I take this opportunity to thank our clients and shareholders for the trust they have in our competencies and our regulators, the Central Bank of Kuwait, for their non-stop support. I would also like to thank our executive management team for their management and their execution of the Groups strategy, and our staff for their persisted support and commitment.

Furthermore, Mr. Masaud M.J. Hayat, Vice Chairman and Group Chief Executive Officer of Burgan Bank K.P.S.C. added, Burgan effectively optimized its global companies to mitigate risk and scaled up its Kuwait focus to give double-digit returns to the shareholders. Burgans cautious growth strategy, focus on efficiency and asset quality has ensured persisted growth in profitability

Talking about the deliberate sale of Bank of Baghdad (BoB), Mr. Hayat commented, The sale of BoB will give us with an opportunity to redeploy capital towards our key growth areas, while enhancing our Asset Quality metrics.

Looking ahead, Mr. Hayat said, Digital transformation of our operations is one of the main priorities of the banks new strategy in the coming period. We look to the year 2020 to represent an essential milestone by dedicating our efforts on long term sustainability with a focus on environmental, social and economic pillars via working to develop human capital, applying the standards of good governance, and the digital transformation of our business activities. We firmly trust that this transformation will improve the delivery of our precious services and offers to our valued customers. "

Mr. Raed Al-Haqhaq, Deputy Group Chief Executive Officer & CEO- Kuwait of Burgan Bank K.P.S.C said, Kuwait operations have had another robust year with upgrades throughout the key metrics. The Kuwait Revenues grew by 7% while its loan book grew by 8%. Kuwaits Cost to Income ratio increased to 27.6% and its price of credit elevated to 50bps while its NPL ratio was stable at 1.6%.

Please note that beginning this year; the Bank has revised its monetary statements closing process by changing the reporting date of its subsidiaries to one month earlier than the Groups reporting date. Accordingly, the stated monetary results of FY19 include only eleven months (i.e. January to November) performance of the subsidiaries instead of full twelve months as included in prior periods.

The consolidated financials encompass the results of the Groups operations in Kuwait, and its share of results from its subsidiaries, Burgan Bank Turkey, Gulf Bank Algeria, Bank of Baghdad and Tunis International Bank. Through this regional reach, Burgan Bank has one of the largest regional branch networks with 164 branches throughout Kuwait, Turkey, Algeria, Iraq, Tunis, Lebanon and a representative office in the United Arab Emirates.