(MENAFN- Arab Times) Burgan Bank today announced a first quarter 2011 net profit of KD 11.8 million after taking precautionary provisions of KD 4.6 million. The reported earnings growth was 55% over the previous quarter and 11 times higher in profitability than first quarter 2010.
For the period ended March 31st 2011, operating income reached KD 38.8 million and operating profit was KD 23.0 million with Earning per Share (EPS) of 8.2 fils. Fees and commissions grew by 24% to KD 9.5 million and provisions charge continued the downward trend to KD 5.7 million, including the precautionary provision, compared to KD 22.5 million in quarter one of 2010.
The consolidated financials encompass the results of Kuwait operations and Burgan Bank share from its subsidiaries, namely Bank of Baghdad, Gulf Bank Algeria, Tunis International Bank and Jordan Kuwait Bank, in which Burgan Bank has a majority stake.
Burgan Bank's Chairman, Majed Essa Al-Ajeel said: "Burgan Bank Group foresees positive growth as we progress into 2011. Our financial performance has significantly improved in the first quarter reflecting lower credit costs. Our subsidiaries continue to be on growth trajectory, despite the current regional circumstances."
Commenting on the results, Burgan Bank's Chief Executive Officer Eduardo Eguren said, "We are pleased that our overall performance, particularly of our core revenues, is on a growth trajectory. If we exclude a onetime consolidation gain of KD7.8 million in 2010, our revenues improved by 10% year on year and non-performing loans (NPLs) have been reduced to 6%."
"Our Balance Sheet remains strong with a capital adequacy ratio of 20.6%, and comfortable liquidity levels. We are on the right track toward reaching pre-crises profitability levels," Added Eguren
On behalf of the board and the executive management team, I take this opportunity to thank our customers and shareholders for their confidence in our capabilities, and Burgan Bank staff for their continued support and commitment."
Net income in the three months to March 31 was 11.8 million dinars ($42.92 million), from 1.06 million dinars in the year-earlier period, the bank's financial statements posted on the Kuwaiti bourse website on Wednesday showed.
It did not give a reason for the profit surge but provisions during the quarter dropped to 5.7 million dinars compared with 22.5 million dinars in the first quarter of 2010, while operating income reached 38.8 million dinars.
Last year, the lender raised $400 million from a ten-year bond at 7.875 percent. The proceeds would be used to strengthen Burgan's local operations and expansion plans, it had said.
Burgan Bank was established in 1977 as a public shareholding company. Despite the fact that it is the youngest commercial bank in Kuwait, today, it ranks among the top Kuwaiti banks. Burgan Bank offers both retail and commercial banking services and is active both in the Gulf region and internationally.
The turning point for Burgan Bank came in the year 1997. The privatisation process of the Kuwaiti government, which began in the same year, reduced government ownership in the bank from 61% to less than 10%. KIPCO now has the single largest stake in the bank. The change in ownership paved the way for a rigorous change in the strategic focus and management style.
The bank has been growing at a consistent pace; Burgan has 24 branches, 130 ATMs, 2 mobile ATMs which is a testament to their customer focus. The bank currently employs 753 employees, comprising both Kuwaitis and Non-Kuwaitis that demonstrates the fabric of globalisation and openness in the organisation's culture.
The bank is currently committed to developing its private banking activities with innovative and diversified investment and financial products, enhancing treasury operations, increasing syndication activities, and expanding the bank's retail products.
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