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

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FY 2022 National Bank of Kuwait Earnings Call

Tuesday, 31 January 2023

Edited transcript of National Bank of Kuwait earnings conference call that took place on Monday, 30 January 2023 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

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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 fourth quarter and the
	year 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. Thank you for joined us today for our fourth quarter and
	full year 2022 earnings webcast.
	As we always start our call with the disclaimer, 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. Please refer 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 financials by Mr. Sujit Ronghe,
	our Group CFO. Following the management presentation, we will answer any
	questions received through the webcast platform. Also, feel free to send any follow-
	up questions or required clarifications to our Investor Relations email address.
	Today's presentation is already available on our Investor Relations website for ease
	of reference.
	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 fourth quarter and
	full year 2022 earnings webcast.
	Let me start the call by updating you on the overall operating environment, globally,
	in the GCC and in Kuwait.
	The world macroeconomic environment has taken a turn this year as the rise of global
	inflationary pressures led to further monetary policy tightening across all markets;

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resulting in a slowdown in global growth and loss of momentum and leading to potentially a global recession scenario.

The GCC region including Kuwait fared better than most of the global markets; supported by high hydrocarbon prices along with some legislative and economic reforms. IMF estimates GCC's GDP growth to reach 6.5% in 2022.

In Kuwait, economic activity continued at a decent pace confirming a very healthy rebound of post pandemic GDP growth. This was achieved as a result of higher oil prices, increased output levels and improved business sentiment. Oil sector output gains in 2022 coupled with consumer-led gains in the non-oil sector are expected to have pushed headline GDP growth to a more than ten year high of 7.8%.

Looking ahead to 2023, headline growth could slow, largely on the back of OPEC- mandated oil production cuts, which will push Kuwait's oil sector GDP growth down, while non-oil activity is expected to grow.

Moving to NBK, in a milestone year marking our seventieth anniversary, we achieved the highest annual profits in the Bank's history; reflecting the soundness of our prudent strategy and solid financial position. The Group achieved year on year growth of 40.5% in net profits for 2022 reaching KD 509 million, driven by solid operational performance and improving cost of risk. This affirms NBK's success with its proactive approach over the years, the resilience of our business model and our ability to capture opportunities. Moreover, our board of directors has recommended a distribution of 25 fils per share for the second half of 2022, bringing total cash distribution for the year to 35 fils per share, in addition to 5% bonus shares.

On the strategy front, we continue to focus on balancing long-term investments with meeting current financial commitments to drive growth in today's challenging economic environment. We strengthened the foundation of the Group through strategic investments in people, processes, technology, and products.

In Kuwait, we will build on our leading market position to benefit from the expected pickup in activity that will reflect positively on wholesale banking, the strong consumer sentiment and spending and our ability to deliver innovative products and services. Additionally, we will continue to benefit from our unique position as the only financial institution with access to both conventional and Islamic banking markets in Kuwait.

Moreover, we continue to grow across key growth markets and segments. In 2022, banking on NBK Group's strong reputation, our international operations maintained a solid pipeline of business activity while executing transactions in line with our strategic initiatives to maintain a diversified credit portfolio and funding base.

On the wealth management side, we continued to grow our market share in asset management by providing exceptional solution-driven relationship and advisory

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