Reporting KD 222 Million in Revenue and KD 43.5 Million in Net Income

Kuwait, 18 February 2024: Burgan Bank (“Burgan” or “the Bank”) announced its financial results for the fiscal year ending December 31, 2023 (FY’23). The Bank capped off a pivotal transformational year with healthy revenue, stable asset levels and a solid capital base.

By year-end, Revenue reached KD 222 million, supported by 8% growth in Non-Interest Income to reach KD 87 million, along with a solid Net Interest Income of KD 135 million. The Bank’s operating profit for the year reached KD 106 million.

The Bank generated Shareholders Net Income of KD 43.5 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.

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.

Commenting on Burgan’s financial results, the Bank’s 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.” Adding: “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.”

The Chairman further stressed Burgan’s renewed focus on its Kuwait operations, saying: “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.” According to the Bank’s Chairman, this includes restructuring Burgan’s portfolio, pursuing the sale of non-core assets, investing in new markets and seeking growth opportunities in untapped segments.

The Chairman also noted that a clear indication of Burgan’s solid financial core and its stable standing is its credit rating, as the Bank continues to be rated in investment grade by all the leading rating agencies with a stable outlook. 

The Bank continues to be rated well by all the major credit rating agencies. Burgan’s Long- term Issuer Default Rating by Fitch is “A” with stable outlook, its Long-term Deposit Rating by Moody’s is “Baa1” with stable outlook, and its Issuer Credit Rating by S&P is “BBB+” with stable outlook. Lastly, Capital Intelligence has affirmed the Bank’s Long-term Foreign Currency ratings at “A+” with stable outlook.

Leading with innovation for a seamless, modern banking experience

In 2023, Burgan Bank continued to accelerate its efforts to enhance and develop its banking experience for all segments of customers. According to the Chairman, streamlining and enhancing the banking experience is at the heart of Burgan’s new strategy.

“When it comes to our banking journey and our solutions, we have adopted an integrated, innovation-driven approach. We seek to interweave our digital transformation with our ESG commitments to deliver the most modern, most inclusive and most personal experience possible to our customers. Digitization undoubtedly remains a central theme, but it goes beyond that. Our aim is to enable and empower our customers to bank better, bank smarter and bank more sustainably,” said the Chairman. Adding: “Our transformation has only just started, but 2023 set the stage for what we seek to establish as the ‘Burgan way of banking.’”

In line with its new vision, Burgan Bank continues to pursue focused development across its entire business and operations. This includes continuing to grow its segment base; serving retail, corporate, and SME clients with a more diversified product portfolio; maintaining a constantly evolving offering of modern financial solutions; and providing an elevated, customized level of service.

In 2023, Burgan Bank launched Tijarati Pay, a new and unique enhancement to its market-leading small and medium-sized enterprise (SME) platform, Tijarati. The Bank’s one-of-a-kind offering to local businesses, especially entrepreneurs and SMEs, is the first of its kind in the region, and it integrates multiple aspects of payment collection and monitoring, thereby transforming how merchants manage their finances.

Additionally, in another first for the market, Burgan Bank introduced biodegradable and braille-friendly debit cards to facilitate transactions for visually impaired customers, offering a smart solution that promotes sustainability and inclusivity. In the last quarter of 2023, the Bank also launched its new virtual card; an eco-friendly alternative, this innovative product combines the security and utility of traditional bank cards with the convenience and versatility of a digital experience.

The Bank also expanded its digital payment offerings in 2023 by launching Google Pay and Apple Pay to allow its customers to make secure contactless payments across Android and iOS platforms. Burgan was also the first bank in the MENA region to implement a Visa solution allowing cardholders to easily enroll in multiple digital wallets and eCommerce merchants within their mobile banking app.

On another front, Burgan Bank continued to expand its segment offerings. In late 2023, and in an effort to elevate the banking experience it offers to its more affluent customer segment, the Bank announced the launch of Elite Banking, a new banking segment for distinguished customers with an array of the finest services that unlock a world of luxury. The Bank also revamped its existing Premier Banking to better serve another segment of customers.

Additionally, in 2023, Burgan revamped its Kanz Draw Account, which is already considered one of the strongest in the market, in order to reward its customers and maximize their chances of winning valuable and life-transforming prizes. The remodeled draw account prizes grant customers an exclusive opportunity to win KD 2,000 in the monthly draw and KD 500,000 in the semi-annual draw, while the annual draw awards one lucky winner with the grand prize of KD 1,500,000.

A continued investment in Kuwaitization and long-term human capital development

Furthermore, the Chairman noted that one of the most important components of Burgan’s new strategy is its investment in people and human capital. He said: “This year, we rolled out a comprehensive restructuring across the entire organization, including a number of strategic appointments and promotions at the leadership level, in order to truly position Burgan as the most progressive and dynamic Bank in Kuwait.”

Burgan Bank continued to prioritize investing in its human capital and empowering its top Kuwaiti talents, especially in critical leadership positions. In fact, the Bank remained dedicated to nurturing employee potential and fostering a culture of dynamic development and constant growth, enabling all employees to collectively lead the Bank’s ambitious transformation plans.

In 2023, Burgan Bank became the first bank in Kuwait to be officially certified as a ‘Great Place to Work’, in addition to being named one of the 20 Best Workplaces in Kuwait and being ranked 27^th on the ‘Large Organizations’ list of Best Workplaces in Asia™ 2023. This serves as the ultimate testament to the Bank’s people-first commitment and the soundness of its human capital investment and proves Burgan is well positioned as an employer of choice in the Kuwaiti market.

By year-end, the Bank had reached an impressive 83% Kuwaitization rate among its workforce – surpassing the minimum regulatory requirements by 13% - and marking one of the highest rates in Kuwait and across the banking sector. In fact, in 2023, 95% of all new hires during the year were Kuwaitis. Additionally, female employees accounted for 48% of the workforce at Burgan Bank by year-end, cementing the Bank’s inclusive and equity-based approach to human capital development.

The Bank’s impressive human capital philosophy resulted in it receiving the GCC Excellence Award in the Recruitment and Development of Nationals from the Council of Ministers of Labor and Council of Ministers of Social Affairs in the GCC States Executive Bureau for the year 2023. The coveted award, which recognizes private institutions’ outstanding efforts in employment and localization across the GCC, underscores Burgan’s unwavering commitment to the localization of its workforce.

In addition to the dedication to recruiting Kuwait’s brightest professionals, Burgan Bank sought to ensure a path of continued growth and improvement for all employees, with the Bank dedicating more than 46,994 training hours to the development of its Kuwaiti talents.

Burgan’s commitment to bespoke development tracks is also reflected in the Bank’s dedication to designing the ideal model for professional bank employees through the Ro2ya Program, which is regarded as one of the most forward-looking human capital development programs of its kind in the local market. In 2023, a total of 52 Burgan employees graduated from the Ro2ya program. The Bank’s development strategy led to it receiving the prestigious Brandon Hall Human Capital Management (HCM) Excellence Silver Award for its outstanding application in the “Learning and Development – Learning in the Flow of Work” category.