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

PUBLIC

1Q 2023 National Bank of Kuwait Earnings Call

Thursday, 20 April 2023

Edited transcript of National Bank of Kuwait earnings conference call that took place on Wednesday, 19 April 2023 at 14:00 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 14

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 first quarter earnings
	call for the year 2023. 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. Once again, we welcome you on our call today and thank
	you for joining us in today's webcast to cover the financial results of NBK Group for
	the first quarter of 2023.
	We will start our presentation with the disclaimer like we always do. So for this
	reason, 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.
	Our Vice Chairman and Group CEO, Mr. Isam Al-Sager, will start the presentation by
	giving some opening remarks on the operating environment and the highlights of
	the quarter. This will be 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. And feel free to send
	any follow-up questions to our Investor Relations email address. Today's
	presentation is already available on our Investor Relations website for your
	convenience.
	Now let me handover the call to Mr. Isam Al-Sager for his opening remarks.
Isam Al-Sager:	Thank you Amir.
	Good afternoon everyone. I am glad to join you today for an update on our
	performance during the first quarter of 2023
	The overall global economic outlook continues to be very uncertain. Moreover, the
	recent US bank failures and the concerns of a spillover in Europe are adding to that
	uncertainty and creating turbulences in the banking industry across the globe.

Page 3 of 14

PUBLIC

In the region, the situation remains more stable. GCC lenders enjoy solid funding and high level of expected government support leaving them well equipped to withstand the current challenges and risks.

In Kuwait, economic activity is expected to slowdown in 2023, though will remain solid, as post-pandemic consumer spending eases, real estate and credit demands soften alongside lower oil output in accordance with OPEC plus production targets. GDP growth is forecasted to slow down to negative 0.3% in 2023 before rebounding to 3.3% in 2024. Oil GDP on the other hand is expected to contract by 3.7% in 2023 while non-oil GDP is expected to grow by around 3.8% during the year.

The government's draft budget for FY23/24 is expansionary and should support the economy in the near term. However, political gridlocks and the prospect of fresh elections later this year will likely delay the budget approval and negatively impact the previously hoped-for rebound in investment in 2023.

Moving to NBK, the Group is starting the year on a solid footing with robust results. We delivered a net profit of KD 134.2 million, growing by 15.1% year on year. The Bank's strong performance is driven by core banking activities with operating income growing by 18.4% year on year to reach KD 277.9 million; affirming NBK's success in the implementation of its strategic initiatives.

Building on the exceptional performance in 2022, we will continue to invest strategically in our talents and technologies to drive future growth. Furthermore, our diverse business model and prudent risk management will help us navigate through any potential scenarios as the uncertainty in the economic scene unfolds.

On the ESG front, we remain focused on implementing various initiatives that promote responsible business practices. During the first quarter of the year, we continued to demonstrate our commitment to integrating ESG into our strategy and operations. We started the year by announcing our commitment to become carbon neutral by 2060, a milestone step that aligns with Kuwait's pledge to carbon neutrality and reflects NBK's commitment to making climate change risks a top priority in the Group's agenda. Moreover, during the quarter we also joined the United Nations Global Compact, the world's largest corporate initiative advancing sustainable and socially responsible business practices. As pioneers of sustainability in our industry, we recognize the importance of setting an example of responsible leadership through supporting the transition of all our stakeholders.

For the remainder of 2023, we will continue to build on our healthy balance sheet as we are well-positioned to continue to evolve into the bank of the future. Leveraging our solid financial position, strong capitalization rates, and ample liquidity levels, we are confident that we will continue delivering attractive returns for our shareholders.

Page 4 of 14