Burgan Bank announced results of its operations for the year ending December 31st 2019 which showed that the bank’s net profits (after tax deductions) reached KD 84.9 million, rising by KD 1.2 million or by 1.4% compared with KD 83.7 million in 2018. This rise in the net profits is mainly due to the decline in the operating profit by a lower value than the decline in total provisions, in which the operating profit declined by KD 7.6 million and total provisions declined by KD 12.1 million. The following graph displays development in profits level relevant to the bank’s shareholders during the period 2008-2019:
In details, total operating income decreased by KD 17.1 million or by 6.5%, reaching KD 248.2 million compared with KD 265.3 million. That resulted from the drop in all items of the operating income except for item net investment income that increased by KD 10.4 million. Most importantly, net interest income item declined by KD 16.9 million, to reach KD 167.1 million versus KD 184 million.
Total operating expenses decreased by a greater value than the decrease in total operating income, it decreased by KD 9.5 million or by 8.5%, and scored KD 102.2 million compared with KD 111.7 million, due to the decline in all items of the operating expenses. Percentage of total operating expenses to total operating income scored 41.2% versus 42.1%. Value of total provisions declined by KD 12.1 million or by 19.8% as mentioned previously, scoring KD 49.2 million compared with KD 61.3 million in the end of 2018. Net profit margin increased to 24.5% compared to 22.1% at the end of 2018.
The bank’s financial statements indicate a decline in total assets by KD 231.1 million or by 3.2%, reaching KD 7.081 billion compared with KD 7.312 billion in the end of 2018. Item of cash & cash equivalents decreased by KD 549.8 million or by 47.2%, scoring KD 614.5 million (8.7% of total assets) compared versus KD 1.164 billion (15.9% of total assets). While item of due from banks & other financial institutions rose by KD 110.5 million or by 18.6%, scoring KD 704.8 million (10% of total assets) compared with KD 594.3 million (8.1% of total assets) in the end of 2018. Loans and advances to customers increased by KD 21.6 million or by 0.5%, reaching KD 4.284 billion (60.5% of total assets) versus KD 4.263 billion (58.3% of total assets) in the end of 2018. Percentage of loans and advances to customers to total deposits and other balances scored 75.5% versus 70%.
Figures indicate that the bank’s liabilities (excluding total equities) decreased by KD 235.8 million or by 3.7%, and scored KD 6.129 billion compared to KD 6. 365 billion in the end of 2018. Percentage of total liabilities to total assets scored about 86.6% versus 87% in 2018.
Results of analyzing financial statements indicate that bank’s profitability ratios showed mixed performances compared with the end of 2018. Return on average assets (ROA) rose to 1.2% compared to 1.1%. Return on average equities relevant to bank’s shareholders (ROE) dropped to 11.3% compared with 11.6%. Return on average capital (ROC) dropped to 33.1% from 36%. Earnings per share (EPS) reached 24.1 Fils compared to 29.6 Fils. (P/E) scored 12.6 times compared to 9.4 times, due to the decrease in the EPS by 18.6% against an increase in the share market price by 9.4%. (P/B) scored 0.8 times compared to 0.7 times in the end of 2018.
Burgan bank announced the distribution of cash dividends by 12% of the nominal value of the share equivalent to 12 Fils. This means the share has achieved a cash yield by 3.9% on the closing share price in the end of December 2019 at 304 Fils per share. Cash dividends were at 12% for 2018 in addition to distribution of 5% bonus shares, indicating that the bank has decreased its distributions.