18/02/2025
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18/02/2025
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KUWAIT CITY, Feb 18: Burgan Bank (“Burgan” or “the Bank”) announced its financial results for the fiscal year ended December 31, 2024 (FY’24).
The Bank’s good performance in FY’24 reflects a focus on executing its strategy, achieving growth, and delivering consistent profitable performance while maintaining robust asset quality and resilient capital levels. The Bank generated a net income of KD 46 million in FY’24 compared to KD 44 million reported the year before – marking a growth of 7% y-o-y. This performance was primarily driven by well-diversified and resilient revenue streams, risk-calibrated asset growth, and lower cost of credit.
The Bank reported total revenues of KD 229 million during FY’24, marking a 3% y-o-y increase. Higher revenues were driven by a net interest income of KD 157 million (+17% y-o-y) – supported by higher net interest margins (NIMs) of 2.3% (+20bps y-o-y). NIMs were higher due to noticeable business growth across franchises and higher margins. The Bank’s Credit Costs (net of recoveries) were significantly lower at 14bps for the year. Such low credit costs indicate the inherent strength of the Bank’s credit portfolio.
Meanwhile, hyperinflation (IAS 29) related losses were significantly lower in 2024 at KD 24 million, compared to KD 32 million reported the year before – reflecting an improvement of 25% y-o-y, which was largely driven by the improved inflationary situation in Turkey along with other key macro parameters.
Burgan continued on its growth trajectory with its asset base reaching KD 8.2 billion (+10% y-o-y). The Bank’s loans and advances were up by 6% y-o-y to reach KD 4.5 billion, mainly supported by Kuwait’s loan portfolio, which was up by 7% y-o-y. Total customer deposits were up by 10% to reach KD 4.9 billion. It is worth highlighting that despite the elevated interest rates and highly competitive landscape, the Bank leveraged its strong franchise to attract new CASA deposits, increasing volumes by 5% y-o-y.
Burgan maintained its asset quality during FY’24 with a Non-Performing Loan (NPL) ratio of 1.8% (an improvement of 20bps y-o-y) and a Provision Coverage of 162%. Moreover, the Bank’s capital metrics remained solid with a Common Equity Tier 1 (CET1) ratio of 12.6%, and a Capital Adequacy Ratio (CAR) of 18.6%, compared to the regulatory minimum ratios of 10.5% and 14.0% respectively. Additionally, as of Q4’24, the Group continues to maintain adequate liquidity levels with a Liquid Coverage Ratio (LCR) and a Net Stable Funding Ratio (NSFR) of 153% and 116% respectively, which is well above the minimum regulatory requirements of 100%.
In light of the 2024 performance, Burgan’s Board of Directors recommended a cash dividend of 6 fils per share and a bonus share of 5% for the full year ending 31 December 2024, subject to shareholders’ approval at the Annual General Meeting.
Commenting on the Bank’s financial results, Burgan’s Chairman, Sheikh Abdullah Nasser Al-Sabah, said: “On behalf of Burgan’s Board of Directors and Executive Management, I am delighted to announce our collective success for another year; delivering on our promise to our shareholders, customers, employees, and the community to deliver long-term value and banking excellence. Burgan’s continued growth is a testament to the soundness of the strategic goals that guide its institutional operations and the future-focused vision shaping its performance. Today, more than ever, we remain focused on cementing ourselves amongst the most modern and progressive banks in Kuwait.”
The Chairman noted that Burgan’s steady growth and unwavering excellence in delivering top-tier banking services are due to the intricate balance that the Bank preserves between its commitment to market expansion, digital advancement, infrastructure fortification, continuous operational upgrading, dedicated human capital development, prudent risk management, and vigilant cybersecurity.
Burgan Bank’s healthy financial performance and solid credit standing were further endorsed by the evaluations of leading rating agencies. In 2024, Capital Intelligence, Fitch, Moody’s, and S&P affirmed Burgan’s long-term issuer default ratings at A+, A, Baa1, and BBB+ respectively with a stable outlook, reflecting last year’s ratings. Additionally, Fitch Ratings upgraded Burgan Bank Turkey’s Long-Term Foreign-Currency (LTFC) Issuer Default Rating (IDR) to ‘BB-’ from ‘B’ and Long-Term Local-Currency (LTLC) IDR to ‘BB-’ from ‘B+’, with a stable outlook.
In yet another affirmation of the Bank’s healthy credit profile, Burgan successfully concluded its first-ever “KD-denominated” perpetual bond issuance in the local market with an issue size of KD 150 million. The issuance was oversubscribed, confirming strong investor interest and confidence in Burgan’s credit profile. This issuance was part of the wider funding strategy of the Bank, which included the issuance of KD 150 million worth of new AT1 bonds and subsequent redemption of legacy USD 500 million AT1 bonds issued in FY’19 on its first-call date.
Further attesting to the Bank’s position as a trusted financial partner, Burgan was voted the Best Domestic Bank in Kuwait in the 2024 Euromoney Trade Finance Survey. Additionally the Bank ranked 35th on The Banker magazine’s list of Top 100 Arab Banks in 2024 and 89th on Forbes Middle East’s Top 100 Listed Companies in 2024.
Burgan’s Chairman concluded his statement by confirming that, “In adherence to our philosophy, ‘Driven By You’, and our unwavering commitment to the highest environmental, social, and governance (ESG) standards, our achievements throughout FY’24 were guided and fueled by our ultimate goal to deliver an outstanding banking experience that responds to our customers’ evolving needs whilst contributing to our valuable community’s holistic development. As we review a year in achievements, we continue to build a resilient foundation for greater future success.”
Advancing Banking for Burgan Customers and Community
With customers being at the heart of every business consideration, innovative offerings, or operational upgrades, 2024 witnessed the introduction and enhancement of numerous products and services that serve customers’ needs across all segments at Burgan.
“As a Bank that is ‘Driven By You’, Burgan’s success over the past year was inspired by our customers’ growing aspirations and the market’s ambitious growth,” said Mr. Tony Daher, Group Chief Executive Officer at Burgan Bank. “Today the market and our customer base include wider circles and more segments with diverse financial needs and growth goals. Upholding our promise to deliver an unmatched banking experience, our teams work tirelessly to understand our varying customers’ evolving needs and combine them with the latest technologies and global trends.”
Among the areas where Burgan Bank made notable advancements is Private Banking and Wealth Management, which was reintroduced to the market with a new brand and identity, complemented by a suite of new and enhanced products and services, under a motto of “Building Trust and Growing Wealth”. To guarantee that Burgan’s High-Net-Worth-Individuals (HNWI) and Ultra-High-Net-Worth-Individuals (UHNWI) receive a best-in-class service, the Bank acquired a range of new investment licenses from the Capital Markets Authority (CMA), including custodian, investment advisory, portfolio management, and unregistered securities brokerage licenses, to fulfill clients’ investment and wealth management ambitions in line with their individual portfolios, liquidity requirements, and capacities for risk.
Besides broadening the range of products and services, Burgan Bank expanded the network of branches that serve Private Banking and Wealth Management clients across Kuwait, which now includes Al-Adailiya and Al-Shaheed branches. In addition to the branch expansion serving this segment of clients, Burgan also inaugurated a new branch that serves corporate customers in Sabhan, as well as another branch in Da’iya that serves retail customers.
The Bank’s efforts to elevate its customers’ experience also included every segment from kids to youth and adults. Burgan introduced notable enhancements to the awal and Youth accounts, in addition to launching the most exclusive invitations-only Visa credit card, targeted at the Bank’s UHNW clients. Under the umbrella of its fruitful partnership with Visa, Burgan Bank also relaunched its co-branded Qatar Airways credit and prepaid cards, offering cardholders exclusive benefits and rewards.
Reimagining Banking with State-of-the-Art Digital Solutions
In adherence to the Bank’s strategic goal for digitally transforming and technologically elevating its operations and offerings, as well as its active contribution to Kuwait’s Vision 2035 goal for digital transformation, Burgan launched several digital banking solutions that aim to enhance all customers’ banking journey. Furthermore, to support its steadfast digital transformation strategy, Burgan signed an agreement with market-leading Tata Consultancy Services (TCS) to upgrade its core banking system by implementing the TCS BaNCS suite of products. The deal confirmed the Bank’s commitment to fortifying its digital infrastructure for a seamless transition from traditional to digital banking.
Additionally, Burgan was among Kuwait’s earliest adopters of the GCC real-time cross-border payments system AFAQ. Shortly after plugging into AFAQ, the Bank announced the launch of the instant payment service WAMD, developed by KNET, which customers can conveniently utilize using the Burgan Mobile application.
Furthermore, the Bank’s Turkish digital banking brand ON achieved a significant milestone in 2024 by reaching more than 1 million customers within only three years of its launch. ON, with its next-generation banking approach and renewed brand identity of “comfortable banking”, delivered remarkable growth in the highly competitive Turkish banking sector across all critical metrics. According to the Remote Acquisition Market Share Report published monthly by the Banks Association of Turkey (TBB), ON’s remote acquisition market share increased by 96.5% y-o-y to reach 5.7% in 2024.
Enhancing Offerings To Attain Market Leadership
In line with its strategy of asset reallocation and building new revenue streams, Burgan Bank signed a Share Purchase Agreement (SPA) to acquire United Gulf Bank B.S.C (UGB) – a wholesale bank licensed and headquartered in Bahrain – from United Gulf Holding Company B.S.C. (UGH) for USD 190 million after receiving all regulatory approvals (in Kuwait and Bahrain). This transaction, which is expected to be completed within the first quarter of 2025, provides Burgan with an opportunity to tap into key high-growth sectors of Islamic financing and investments while creating significant cross-selling and up-selling opportunities.
The Bank also underscored its dedication to contributing to Kuwait’s economic growth and development with the signing of 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.
Nurturing the People Who Nurture the Business
Guided by its strategic mission to be an employer of choice, Burgan Bank upheld its promise throughout 2024 to contribute actively to hiring and developing Kuwait’s aspiring national talents and promising professional calibers.
“None of our achievements would be possible without our exceptional Burgan talents who nurture leading financial solutions from idea to product,” said Mr. Daher. “An important pillar of our institutional success is owed to the inspiring environment of continuous learning we foster at Burgan, where learning opportunities are available to all employees at their fingertips, allowing them to develop and grow at their pace of choice and along their fields of interest.”
As a certified Great Place to Work, Burgan Bank upheld its commitment to human capital development throughout 2024, which is evident in its numerous L&D achievements. This includes the graduation of the second cohort from Burgan’s flagship talent development program, Ro’ya, which aims to prepare high-potential calibers for leadership roles as middle, senior, and executive managers. The Bank also celebrated a new group of talents who were carefully selected to enroll in the third round of Ro’ya. Additionally, Burgan introduced the Ro’ya Mentorship Module for Visionary Leaders, designed specifically to prepare emerging senior leaders on the personal and professional fronts with the guidance of Burgan’s senior executives.
Other talent development programs that enabled Burgan’s finest talents to unlock their full potential include Entilaqah, designed to equip fresh graduates for the professional market; the Investment and Wealth Management Academy, designed in partnership with Fitch Learning to support the Bank’s expanding Private Banking and Wealth Management services; and Burgan Cares, which supports employees in their pursuit of earning their Bachelor’s and Master of Business Administration (MBA) degrees.
In addition to the numerous programs that Burgan’s dedicated teams develop to support aspiring talents’ personal and professional growth, the Bank also collaborated with leading educational institutions to guarantee that its staff receive best-in-class L&D opportunities. Among the Bank’s most notable partnerships on the talent development front is with the Kuwait Institute for Banking Studies (KIBS), which saw the graduation of many Burgan talents from its leading programs, such as the Kuwait Graduate Development Program (KGDP).
Stemming from its firm belief that learning is an expansive experience that takes on many forms, Burgan Bank developed its iconic Burgan Talks into a podcast series, which features some of the Bank’s leadership figures as well as market experts who share their valuable experiences in life as well as in the industry.
Furthermore, the Bank expanded its efforts to develop national calibers to include budding talents who have recently graduated or are yet to graduate. This includes the Empower Her summer internship program, which hosted 18 aspiring young women, introducing them to the professional world of banking through some of Burgan’s most inspiring female figures. It also includes Burgan Lab Academy, a forward-looking program designed to prepare young, aspiring fresh graduates for a career in tech development, which is now integral to the growth and expansion of banking services worldwide.
Beyond Burgan’s expansive L&D efforts, the Bank has also exhibited its commitment to developing an inviting, comfortable, and holistically nurturing work environment through various programs that address employees’ diverse needs. Among the Bank’s efforts on this front is growing all staff’s paid-leave credit to include their birthdays, allowing them to achieve a healthier work-life balance that accounts for their personal priorities as much as work responsibilities.
In addition, the Bank reaffirmed its commitment to supporting employees in adopting a healthier lifestyle and receiving proper, timely healthcare through hosting the month-long Rock Your Habits fitness and nutrition program and launching a dedicated on-site clinic at its head office.
On the mental wellbeing and psychological reinforcement front, Burgan Bank unveiled its Lean In Circle for Women Empowerment program, which creates a support network for female employees to express and share the unique challenges they face in their professional careers and receive expert mentorship to overcome them. Furthermore, the Bank underscored the importance of fostering an environment of acknowledgment and appreciation by launching its Burgan Beacon (Manarat Burgan) program, which centers on appreciating and rewarding all employees who go the extra mile in their areas of work.
A Force of Positive Change
In line with its commitment to the highest ESG standards in banking, Burgan Bank remains steadfast in its mission to leave a positive print across its community through sharing knowledge and upholding its promise of developing a socially and environmentally conscious business.
A hallmark of Burgan Bank’s community development success continues to be its rigorous efforts to spread valuable market knowledge and insights through the events it sponsors and hosts. Among the most notable events that Burgan took part in during 2024 was the Empower Her seminar to empower women in leadership positions across society. The event gathered a distinguished audience of around 200 participants, including prominent figures in Kuwaiti banking and various sectors, to share valuable market insights and experiences and expand the network of impactful female industry leaders.
Another event of equal importance that Burgan Bank hosted in collaboration with Kamco Invest was the “Investment Conference 2024”, which adopted the theme “Global Perspectives: Uncovering Challenges and Opportunities Ahead”. The conference discussed crucial topics spanning the global economy, geopolitics, and various asset classes, with the attendance of more than 600 delegates including thought leaders and industry experts, in addition to institutional and high-net-worth investors from Kuwait and the region attended the conference.
In addition to its continuous efforts to advance the market through sharing knowledge and market insights, Burgan Bank also highlighted its committed adherence to the ESG metrics for being an environmentally conscious business by minimizing its carbon footprint across many of its operations. These efforts include the Bank’s adoption of the DHL GoGreen Plus initiative, which aims to reduce shipment-related carbon emissions by supporting DHL’s adoption of sustainable aviation fuel (SAF) and choosing the DHL Express greener courier services across its value chain.
The Bank also resumed its efforts to turn its headquarters into a symbol of environmental consciousness by adopting numerous energy-saving and waste-reduction protocols and solutions. Attesting to Burgan’s commitment to sustainability, the 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 U.S. Green Building Council (USGBC) for operations and maintenance at its head office building in Kuwait City.
National Talents Making International Waves
Adding to the recognition received for its efforts in sustainability, Burgan Bank was widely celebrated for its unwavering commitment to excellence across all facets of its operations. This includes receiving the coveted ‘Quality Recognition Award’ for the year 2023 from J.P. Morgan Chase N.A. in recognition of its consistently high-quality performance. The award acknowledges the advanced standards maintained by the Bank across the complete range of clients’ US Dollar funds transfer operations by the management and staff.
In addition, the Bank received three accolades at the Global Private Banker MEA Awards 2024: the “Best Private Bank for Credit” award, the “Best Private Bank for Fixed Income Securities” award, and the “Best Private Bank for High-Net-Worth (HNW) Clients” award – attesting to the Bank’s unwavering commitment to excellence and developing competitive products and services, and to its mission to lead with innovation and deliver a differentiated customer experience.
Recognizing the Bank’s unmatched commitment to developing its human capital and Kuwait’s top calibers, Burgan 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.
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, and Tunisia, in addition to a representative office in the United Arab Emirates.
