Underscoring the Bank’s financial core strength Kuwait, 20 May 2024 Capital Intelligence Ratings (CI Ratings or CI) announced that it has affirmed the Long-Term Foreign Currency Rating (LT FCR) and Short-Term Foreign Currency Rating (ST FCR) of Burgan Bank K.P.S.C. (“Burgan or “The Bank”) at ‘A+’ and ‘A1’ respectively. In addition, CI Ratings has affirmed the Bank’s Standalone Rating (BSR) of ‘bbb+’, Core Financial Strength (CFS) rating of ‘bbb+’, and Extraordinary Support Level (ESL) of High. CI also reported that the LT FCR and BSR outlook remain Stable, with no expectation of any of external or internal credit challenges to result in any downward changes to the ratings over the next 12 months. The Bank’s BSR and CFS ratings are supported by good asset quality, solid credit loss absorption capacity, and sound capital adequacy, whereby non-financial supporting factors include Burgan Bank’s good business model and franchise, particularly in Kuwait, and majority ownership by the well-regarded KIPCO group. CI also commented on Burgan’s business strategy, which emphasizes cautious growth paired with strategic priorities - including transforming its retail banking business. CI further added that the Bank’s main focus is Kuwait, followed by a number of international subsidiaries. The proportion of Kuwait-based assets was 77% of the balance sheet at the end of 2023, noting that the remaining assets include the Bank’s subsidiaries in Turkey, Algeria, and Tunisia. Burgan’s previous Iraqi subsidiary, Bank of Baghdad (BoB), was sold in February 2023. The sale was in line with the Bank’s pursuance of strategic asset reallocation. Commenting on Capital Intelligence Ratings’ announcement, Khalid Al Zouman, Chief Financial Officer at Burgan Bank, said: “We are very proud to receive CI’s affirmation of our solid financial standing for yet another year. Our sound credit ratings are a reflection of the Bank’s stable financial core and our steady growth momentum. This success is greatly owed to Burgan’s vision, which centers on strategic priorities such as asset reallocation, digital transformation, human capital development, and sustainability. Furthermore, presenting good overall asset quality confirms our strategic success and cements Burgan’s leading position in the domestic banking sector. As we continue to embark on our transformational journey, we are building on our robust financial base while accelerating growth plans; meticulously balancing market risk with growth potential and progress momentum.” |
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