Burgan posts solid growth in 2023; revenue surges to $719m
KUWAIT CITY, February 18, 2024
Leading Kuwaiti bank Burgan has annoucned that it has capped off a pivotal transformational year with healthy revenue, stable asset levels and a solid capital base.
Announcing its financial results for the 12-month period ended December 31, 2023, Burgan Bank said its revenue surged to hit KD222 million ($719 million), while its operating profit for the year reached KD106 million ($343.3 million).
The revenue jump was mainly driven by 8% growth in non-interest income which rose to KD87 million ($281 million), along with a solid net interest income of KD135 million ($437 million).
The Kuwaiti bank generated shareholders net income of KD43.5 million in FY’23, with income falling marginally due to the impact of Turkey’s hyperinflation-related monetary loss and no income from Bank of Baghdad (BoB), which was sold in Q1’23.
On the other hand, Burgan’s asset quality continues to be stable with a Non-performing Loan (NPL) ratio of 2% for 2023, with the Cost of Credit for the year falling to 10 bps, an improvement of 40 bps compared to last year, said the statement.
Burgan also continued to implement one of the key facets and top priorities of its new transformational roadmap, with the strategic reallocation of its asset portfolio. After having sold its stake in BoB in Q1’23, the bank subsequently sold 52% of its stake in Burgan Bank Turkey (BBT) in Q4’23.
As a result of these transactions, the Bank’s Capital levels increased substantially in 2023, while also improving its risk profile. Burgan’s CET1 ratio increased by 270bps to 13.5 % and Tier 1 ratio increased by 290bps to 16.1% while the Bank’s Capital Adequacy Ratio (CAR) increased by 320 bps to 20.0% as of FY’23.
On its tremendous performance, Chairman Sheikh Abdullah Nasser Al Sabah said: "This past year proved to be one of the most pivotal in Burgan Bank’s almost fifty-year history, as we set about laying the groundwork for our expansive and progressive long-term strategy, with a new mission and vision in place."
"We have long-maintained a solid financial base and a responsive business model, but to ensure our sustainable growth in the years to come, it was essential that we adopt a much more aggressive and progressive approach to development," he stated.
"Our strategy necessitates major investments in our operations, our digital and technology infrastructure, and our human capital. Therefore, it was crucial that we balanced the ambitious growth potential with a prudent risk profile, safeguarding the Bank and its shareholder value," he added.
Sheikh Abdullah further stressed Burgan’s renewed focus on its Kuwait operations, stating: "One of the central tenets of our transformational roadmap is strengthening our core Kuwait business. Our goal is to continue to reallocate assets across our portfolio, reassessing and optimizing certain aspects of our overall operations in line with our core business goals."
This includes restructuring Burgan’s portfolio, pursuing the sale of non-core assets, investing in new markets and seeking growth opportunities in untapped segments, he added.-TradeArabia News Service
