PUBLIC

2Q/1H 2022 National Bank of Kuwait Earnings Call

Wednesday, 27 July 2022

Edited transcript of National Bank of Kuwait earnings conference call that took place on Tuesday, 26 July 2022 at 15:00 Kuwait time.

Corporate participants:

Ms. Shaikha Al-Bahar - Deputy Group CEO, NBK

Mr. Sujit Ronghe - Group CFO, NBK

Mr. Amir Hanna - Head of Investor Relations and Corporate Communications, NBK

Chairperson:

Elena Sanchez - EFG Hermes

Page 2 of 17

PUBLIC

Elena Sanchez:

Good afternoon everyone. This is Elena Sanchez and on behalf of EFG Hermes, I

would like to welcome you all to the National Bank of Kuwait second quarter and

first half 2022 earnings call. It is a pleasure to have with us in the call today Ms.

Shaikha Al-Bahar, NBK Deputy Group CEO, Mr. Sujit Ronghe, NBK Group CFO and Mr.

Amir Hanna, Head of Investor Relations and Corporate Communications at NBK.

At this time, I would like to handover the call now to Mr. Amir Hanna.

Please go ahead Amir.

Amir Hanna:

Thank you Elena.

Good afternoon everyone. We are glad you joined us today for our second quarter

and first half 2022 earnings webcast.

As our usual practice before we start, I would like to bring to your attention that

certain comments in this presentation may constitute forward-looking statements.

These comments reflect the Bank's expectations and are subject to risks and

uncertainties that may cause actual results to differ materially and may adversely

affect the outcome and financial effects of the plans described herein. The Bank

does not assume any obligation to update its view of such risks and uncertainties or

to publicly announce the result of any revisions to the forward-looking statements

made herein. Also I would like to refer you to the full disclaimer in our presentation

for today's call.

We will start the call by some remarks from our Deputy Group CEO, Ms. Shaikha Al-

Bahar, followed by a detailed presentation on the quarterly and half-year financials

by Mr. Sujit Ronghe, our Group CFO. Following the management presentation, we

will answer your questions in the order they are received. Also, feel free to send any

follow-up questions to our Investor Relations email address. And for your

convenience, today's presentation is already available on our Investor Relations

website.

Now let me handover the call to Ms. Shaikha Al-Bahar for her opening remarks.

Shaikha Al-Bahar:

Thank you Amir.

Good afternoon everyone. Thank you for joining us today for our second quarter

and half-year 2022 earnings webcast.

I am glad to join you today to update you on the overall operating environment, our

performance during the period as well as our key strategic initiatives for the

remainder of the year.

During the first half of 2022 and more specifically throughout the second quarter of

the year, worries about the global economic outlook have been increasing with the

Page 3 of 17

PUBLIC

continued fallout from geopolitics, soaring energy prices, high inflation, especially in advanced economies, faster policy tightening by key central banks and prolonged global supply chain disruptions. This has led the World Bank to revise down its global growth forecasts from 4.1% in January to 2.9% in June.

In contrast to that, the situation in the GCC has been relatively better on improved fiscal balances from oil price strength; with the region's forecasted GDP growth accelerating to a decade high of 6.4%.

In Kuwait, GDP is estimated to grow by 8.5% in fiscal year 2022/2023 as economic growth continues to gain traction amid a post-pandemic rebound of private consumption and accelerating corporate activity. Oil GDP growth is expected to reach 12.8% for the year, while non-oil GDP growth is expected to reach 3.7%. The government is projected to post its first fiscal surplus in 8 years, at 8.8% of GDP before FGF transfers, on the back of significantly higher oil revenues and controlled spending growth.

The improving fiscal standing and the easing liquidity constraints have already reflected on the domestic operating environment, which was evidenced by S&P's recent change of outlook on Kuwait's sovereign ratings to stable from negative. These strong signs of economic recovery and strengthening fiscal position increases our confidence that the government will continue with its commitment to spend on infrastructure projects with a bigger role assigned to private sector participation.

On system credit growth, the normalization of economic activities post-pandemic has accelerated business lending at a growth rate of 6.4% year on year, as of May 2022. While household credit remained strong recording 13.6% growth during the same period.

Building on the improved macroeconomic backdrop, NBK delivered solid performance during the six months ended June 2022, with net profits of KD 237.8 million, growing by 47.9% year on year. This outstanding bottom line growth was mainly driven by higher core banking income and a healthy improvement in cost of risk. As for the three months ended-June 2022; NBK posted year-on-year growth of 58.6% in net profits to reach KD 121.2 million, the highest quarterly profits on record for the bank. Moreover, NBK's Board of Directors has approved the first semi-annual dividend distribution of 10 fils per share. This affirms the bank's solid capital position and its ability to consistently generate profits.

Beyond the quarterly results, we remained on course with our strategic priorities. In Kuwait, we expect the improved economic outlook to generate more opportunities and specifically strengthen the demand for business credit, while we gradually see a revival of project tendering and award activity. Outside Kuwait, our business diversification continues to serve us well as we continue to cross-sell our products in various markets, benefitting from the region's economic recovery and NBK's wide

Page 4 of 17

This is an excerpt of the original content. To continue reading it, access the original document here.

Attachments

  • Original Link
  • Original Document
  • Permalink

Disclaimer

NBK - National Bank of Kuwait SAK published this content on 27 July 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 27 July 2022 05:21:02 UTC.