National Bank of Kuwait K P : Transcript of the Analysts Conference

PUBLIC

3Q/9M 2022 National Bank of Kuwait Earnings Call

Sunday, 23 October 2022

Edited transcript of National Bank of Kuwait earnings conference call that took place on Thursday, 20 October 2022 at 15:00 Kuwait time.

Corporate participants:

Ms. Isam Al-Sager - Vice-Chairman and Group CEO, NBK

Mr. Sujit Ronghe - Group CFO, NBK

Mr. Amir Hanna - Head of Investor Relations and 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 third quarter and nine
	months 2022 earnings call. It is a pleasure to have with us in the call today Mr. Isam
	Al-Sager, NBK Vice Chairman and Group CEO, Mr. Sujit Ronghe, NBK Group CFO and
	Mr. Amir Hanna, Head of Investor Relations and 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 third quarter
	and nine months 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 Vice Chairman and Group CEO, Mr.
	Isam Al-Sager, followed by a detailed presentation on the quarterly and nine months
	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 Mr. Isam Al-Sager for his opening remarks.
Isam Al-Sager:	Thank you Amir.
	Good afternoon everyone. Thank you for joining us today for our third quarter
	and nine months 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.
	The challenging geopolitical turmoil continued to overshadow the global economic
	outlook. With ongoing monetary tightening, soaring energy prices and rising inflation.

Page 3 of 17

PUBLIC

This has led the IMF to downgrade its projected global growth for 2022 to 3.2%; implying a risk of slowdown in the global economy.

Against the challenging geopolitical turmoil and negative global economic outlook, the GCC economies including Kuwait continued to exhibit positive sentiment backed by higher oil prices. Moreover, the strong consumer and business sentiments are reflecting positively on non-oil activity thereby accelerating GCC growth. IMF forecasts a 6.5% growth for the region in 2022.

In Kuwait, the economy continues to witness overall positive signs despite concerns on global outlook. The oil sector continues to be a key contributor to GDP growth with both production and oil prices posting gains that are high enough to result in a meaningful fiscal surplus. Kuwait's GDP growth is expected to reach 7.8% in 2022 led by an anticipated 12.1% growth in the oil sector and 3.1% in the non-oil sector. With oil prices averaging $100 per barrel, we estimate Kuwait's fiscal balance to post a surplus of 10.2% of GDP in 2022/23 on modest increase in expenditure. We are confident that these encouraging trends will provide positive momentum in strengthening the banking sector's prospects; as calls to increase capex already dominating the scene.

On the political front, we remain optimistic that the recent formed cabinet and elected Parliament are committed to reach common grounds to provide a reset that will improve political cooperation and kick-start a period of political stability and creating a supportive environment for economic growth and diversification.

Moving to NBK, during the nine months ended September 2022, NBK built on its robust business model recording KD 374.2 million in net profits, growing by 46.9% year on year. As for the three months ended September 2022, we delivered a growth of 45.0% in net profits to reach KD 136.4 million; the highest quarterly profits recorded for the bank. That solid growth was attributed to higher core banking income and a healthy improvement in the cost of risk.

The Bank continues to operate from a position of strength, building on our strategy and financial solidness. NBK's prudent risk management, strong capital and liquidity positions as well as its dynamic-financial management, enables the Group to effectively overcome headwinds.

The Group will continue executing its responsible growth strategy, investing in innovation and new technologies, while advancing its sustainable practices across businesses and operations.

In Kuwait, we will build on our market position to benefit from the anticipated pickup in activity that will reflect positively on wholesale banking, the strong consumer sentiment and spending contributing to retail lending and our ability to deliver innovative products and services. Additionally, we continue to benefit from our

Page 4 of 17