01 April 2009
KUWAIT: Burgan Bank and United Gulf Bank (UGB) announced that Burgan Bank is completing the purchase of Algeria Gulf Bank and Bank of Baghdad from United Gulf Bank. The deal will take Burgan's total stake in Algeria Gulf Bank to 60 per cent and its total stake in Bank of Baghdad to 45.31 per cent. Burgan Bank's expansion strategy that was announced in 2008 involved the purchase of Jordan Kuwait Bank, Algeria Gulf Bank, Bank of Baghdad and Tunis International Bank from UGB.
Burgan Bank also proposed to issue 10% bonus shares to its shareholders at its annual General Assembly and Investors Forum (Shafafiyah). Burgan Bank Chairman, Tariq AbdulSalam, regarding the expansion deal, said, "We are confident that the deal will deliver strong growth and significantly increase our presence across the MENA region. This first stage in our aggressive regional expansion strategy is now almost complete.
While UGB's Managing Director, Masaud Hyatt said, "We are delighted that we are finalizing this part of our agreement with Burgan Bank for the sale of our regional operations. The deal will provide an excellent level of return for our shareholders and we look forward to its final completion in the near future." During 2008, Burgan Bank's deposits grew by 47% and its operating income grew by 14.6% over the previous year. It recently posted its 2008 results with a net profit of KD 37.8 million.
Abdul-Salam said at the assembly, "Our strategy has always been focused around increasing shareholders value. We have upheld prudent risk management, stringent corporate governance and general provisioning which will continue to position us well for sustainable growth in 2009 and beyond. We also look to support the Kuwaiti financial system and government initiatives to help drive the economy ahead.
He further assured that the crisis won't be reflecting itself on the plans of exterior expansion decided by the bank, and this will help strengthen bank's property in Bonds. "Our cost income ratio and our efficiency are still fixed and not affected by the current situation". He added saying that the financial solvency of the bank is very good and that's why the bank doesn't need to increase the capital currently.
Abdul-Salam however, explained that the main reason for not increasing the capital is the decision of the "Fatwa and Tashreeh" committee. He considered the committee's decision as "unfair" for it wasted a liquidity of KD200 million on the bank. He also made the shareholders at ease with assuring them that the bank is not trading in derivatives, which many agree as the main cause of the drop in banks' stock prices.
This assembly was followed by a presentation from the CEO, Jonathan Lyon at the Company's Annual Shafafiyah (transparency) Investors' Forum where Burgan Bank presented a review of 2008 and guidance for 2009 to shareholders, partners and institutional investors.
It gave financial review on the performance in 2008, highlighting the achievements which were basically about the acquisition of Jordan Kuwait bank and the expansion of the ATM machines, registered as general leader in Corporate governance by Hawkamah Institute. Also the presentation underlined the financial strength of the bank that holds a capital adequacy ratio of 13.77%, and liquidity of 10% of total assets in T bills and bonds. Also the hedging policy appears in investment account for only around 3% of the total assets.
KUWAIT: Burgan Bank and United Gulf Bank (UGB) announced that Burgan Bank is completing the purchase of Algeria Gulf Bank and Bank of Baghdad from United Gulf Bank. The deal will take Burgan's total stake in Algeria Gulf Bank to 60 per cent and its total stake in Bank of Baghdad to 45.31 per cent. Burgan Bank's expansion strategy that was announced in 2008 involved the purchase of Jordan Kuwait Bank, Algeria Gulf Bank, Bank of Baghdad and Tunis International Bank from UGB.
Burgan Bank also proposed to issue 10% bonus shares to its shareholders at its annual General Assembly and Investors Forum (Shafafiyah). Burgan Bank Chairman, Tariq AbdulSalam, regarding the expansion deal, said, "We are confident that the deal will deliver strong growth and significantly increase our presence across the MENA region. This first stage in our aggressive regional expansion strategy is now almost complete.
While UGB's Managing Director, Masaud Hyatt said, "We are delighted that we are finalizing this part of our agreement with Burgan Bank for the sale of our regional operations. The deal will provide an excellent level of return for our shareholders and we look forward to its final completion in the near future." During 2008, Burgan Bank's deposits grew by 47% and its operating income grew by 14.6% over the previous year. It recently posted its 2008 results with a net profit of KD 37.8 million.
Abdul-Salam said at the assembly, "Our strategy has always been focused around increasing shareholders value. We have upheld prudent risk management, stringent corporate governance and general provisioning which will continue to position us well for sustainable growth in 2009 and beyond. We also look to support the Kuwaiti financial system and government initiatives to help drive the economy ahead.
He further assured that the crisis won't be reflecting itself on the plans of exterior expansion decided by the bank, and this will help strengthen bank's property in Bonds. "Our cost income ratio and our efficiency are still fixed and not affected by the current situation". He added saying that the financial solvency of the bank is very good and that's why the bank doesn't need to increase the capital currently.
Abdul-Salam however, explained that the main reason for not increasing the capital is the decision of the "Fatwa and Tashreeh" committee. He considered the committee's decision as "unfair" for it wasted a liquidity of KD200 million on the bank. He also made the shareholders at ease with assuring them that the bank is not trading in derivatives, which many agree as the main cause of the drop in banks' stock prices.
This assembly was followed by a presentation from the CEO, Jonathan Lyon at the Company's Annual Shafafiyah (transparency) Investors' Forum where Burgan Bank presented a review of 2008 and guidance for 2009 to shareholders, partners and institutional investors.
It gave financial review on the performance in 2008, highlighting the achievements which were basically about the acquisition of Jordan Kuwait bank and the expansion of the ATM machines, registered as general leader in Corporate governance by Hawkamah Institute. Also the presentation underlined the financial strength of the bank that holds a capital adequacy ratio of 13.77%, and liquidity of 10% of total assets in T bills and bonds. Also the hedging policy appears in investment account for only around 3% of the total assets.
By Nisreen Zahreddine
© Kuwait Times 2009
