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

1Q 2022 National Bank of Kuwait Earnings Call

Sunday, 24 April 2022

Edited transcript of National Bank of Kuwait earnings conference call that took place on Thursday, 21 April 2022 at 14:00 Kuwait time.

Corporate participants:

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

Mr. Sujit Ronghe - Acting Group CFO, NBK

Mr. Amir Hanna - Head of Investor Relations and Corporate Communications, NBK

Chairperson:

Elena Sanchez - EFG Hermes

Operator:

Good day and welcome to the National Bank of Kuwait 1Q 2022 results conference call.

Today's conference is being recorded. At this time, I would like to turn the conference over to Elena Sanchez. Please go ahead now.

Elena Sanchez: Thank you and Good afternoon and good morning 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 2022 results conference 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 Acting Group CFO and Mr. Amir Hanna, Head of Investor Relations and Corporate Communications at NBK.

At this time, I would like to handover the call now to Mr. Amir Hanna.

Thank you.

Amir Hanna:

Thank you Elena.

Good afternoon everyone. We are glad you joined us today for our 1Q 2022 earnings webcast.

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 financials by Mr. Sujit Ronghe, our Acting 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. Al-Sager for his opening remarks.

Isam Al Sager: Thank you Amir.

Good afternoon everyone. Thank you for joining us today for our quarterly earnings webcast.

I am glad to join you today to update you on the overall operating environment, our performance during the quarter as well as our key strategic initiatives for the remainder of the year.

On the overall macroeconomic front, global geopolitics has overtaken Covid as the key source of market worry, causing some concerns regarding the path of economic recovery.

In Kuwait, the operating environment continued to witness some signs of improvement during the first quarter of 2022, despite the ongoing political friction. This was mainly driven by the improved pace of consumer spending and the steady increase in the production and price of oil, which reflected positively on business sentiment and activity.

We forecast GDP growth for 2022 at 8.5% on the back of that rebound in oil production and prices, while non-oil growth is expected to reach 4% for the year.

On the projects market, during the quarter KD 110 million of awards were recorded.

Although the figure fell short of expectations due to the slow approval process as well as supply chain issues, we expect project awards to gradually recover through the remainder of the year. For 2022 we estimate KD2.5 to 3.0 billion worth of projects that are currently scheduled for awarding in the coming months.

Moving on to NBK, we continued to capture the growth opportunities arising from the improved business sentiment; allowing us to generate healthy revenue trends, solid bottom-line growth and strengthening our market leadership position.

For the first quarter of 2022, we reported record quarterly profits of KD 116.6 million, growing by 38.3% year on year. The solid bottom line growth stems from improving revenue trends as well as continued normalization in the cost of risk.

We achieved good progress in advancing our strategic agenda towards digital transformation as well as in executing various technological initiatives. We are stepping into 2022 backed by our strong operational success during the pandemic. Our experience during

Covid confirmed the soundness of the Group's diversification strategy, its flexible business

model and ability to overcome crises.

Moreover, during the quarter, we advanced our efforts to embed ESG practices into our long-term strategies and business plans. In March 2022, NBK established its Sustainable

Financing Framework with the aim of integrating environmental and social standards into our business practices to support the transitions to a more sustainable economy; in line with New Kuwait Vision 2035. In parallel, we also announced our target to reduce our operational

GHG emissions by 25% by the year 2025, as a key environmental initiative under our sustainability commitment.

With that, I want to conclude my comments and will now leave you with my colleague Sujit Ronghe, our Acting Group CFO, who will cover our quarterly financials in more detail.

Please go ahead Sujit.

Sujit Ronghe:

Thank you Mr. Isam

Hello everyone, and welcome.

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