Burgan Bank Group is currently not experiencing any material impact on its profitability
Mr. Al-Ajeel: “Our business model is solid and well prepared to handle volatility if it persists.”
Hedging strategy on investment in Burgan Turkey’s capital protects it against currency volatility
Kuwait, 18/September/2018: Burgan Bank Group (the Group) announced today that its Turkish subsidiary, Burgan Bank A.S. – Turkey (The Bank), remains vigilant with regards to the volatility in Turkey and is, at present, not witnessing any material impact on its profitability. The Group continues to closely monitor the effects of the recent volatility of the Turkish currency and the domestic interest rates and its impact on borrowers and on the economy in general.
Mr. Majed Essa Al-Ajeel, Chairman of the Board of Burgan Bank Group, commented: “We are firm believers in the Turkish economy. Its fundamentals are solid and we are in for the long term. We have the same commitment levels towards our customers and we will support them during these times of stress.”
“Burgan Bank Turkey is adjusting well to its current operating environment. At present, we are not witnessing any major impact on our operations there.
We are profitable and our liquidity is at sound levels. We have implemented a prudent risk model across the Group, and we continue to be selective in our credit process.” added Mr. Al-Ajeel
“We were well-prepared for this type of environment. We hedged our investment in the Turkish subsidiary’s capital three years ago; a move which protected us against the current depreciation in the Turkish Lira. Our business model is solid and will continue to deliver.” Mr. Al-Ajeel continued.
Burgan Bank A.S. – Turkey continues to meet its regulatory capital requirements due to the two pre-emptive capital increases made by the Group in the last nine months. The Bank also proactively monitors its clients’ sensitivity to foreign-exchange rates in order to anticipate any potential deterioration in credit, and to facilitate the clients’ ability to continue to service their loans.
Burgan Bank Group noted that it remains highly liquid, both in terms of liquidity at-hand and contingent liquidity. In parallel, Burgan Bank A.S. – Turkey is comfortably managing its liquidity levels despite the increased demand and cost for liquidity by the broader market.
Burgan Bank Group reiterated that it will continue to remain focused and vigilant of all risks and committed to its long-term strategy as well as to its customers in Turkey as well as its other subsidiaries in Algeria, Tunisia, and Iraq.
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