2005 Net Profit Tops
Burgan Bank Record

KD 42.4_million, EPS at 51.9_fils
ROE surges to 19.2%
Press Release
Kuwait, 06 February 2006

Burgan Bank announced a new historic record in its net profit achievement of KD 42.4 million for the year ending 31/12/2005. This represents an increase of 43% over 2004 and 108% over 2003. Return on equity surged 83% in two years to 19.2%. Earnings per share were pushed to a new dynamic level of 51.9 fils, an increase of 49% over 2004. The Board of Directors has recommended subject to the decision of the General Assembly a dividend of 40 fils per share, a pay out of 77% which represents a boost to shareholders of 60% against 25 fils in 2004.

These outstanding results are the fruits of the Bank’s steady progress since its restructuring in 2003, favorable economic conditions locally and regionally with good levels of business activity which allowed it to continue to significantly improve its productivity in all areas while strengthening its balance sheet.

Operating profit rose substantially in 2005 to KD 43.8 million up by 43% over 2004 and108% in 2003 thanks to a very close collaboration between the Board and Management which sought to improve the Bank’s risk profile while maintaining a modest growth in assets which rose only 9%. Non-performing assets are already dropping and further substantial improvement is expected for 2006.

With sustained activity in all of its business lines, both client and market, the Bank achieved new levels of growth in revenues through client acquisition and the introduction of new products and services. Net revenues increased by 28% and 27% over 2004 and 2003 respectively while regular operating costs were held to an increase of only 10%. This favorable situation allowed the Bank to substantially improve its cost to income ratio to 29.8% as compared to 32.4% in 2004 and 34.8% in 2003.

Burgan Bank’s Chairman Sheikh Mohammed Abdul Aziz Al-Jarrah Al-Sabah expressed, on behalf of the Board of Directors, the Management and Staff, “our deepest condolences to the Al-Sabah family and the people of Kuwait on the recent demise of the late Amir, His Highness Sheikh Jaber Al-Ahmad Al-Jaber Al-Sabah, as he will be sadly missed having guided Kuwait to its current level of prosperity”. Sheikh Al-Sabah warmly praised and congratulated the new Amir, His Highness Sheikh Sabah Al-Ahmad Al-Jaber Al-Sabah and went on to say that the country could now look forward to a new era of strong development and progress while continuing to reaffirm its values.

Turning to Burgan Bank’s 2005 results, Sheikh Al-Sabah commented that “these outstanding results were achieved due to the Management’s success in many areas which led to the improved performance which now stands as the new historic benchmark from the Bank. The timely restructuring is proving itself and the Board is confident in the sustained success of the Bank going forward.”

Sheikh Al-Sabah went on to say “that these results were also linked to the credibility of its Corporate Governance framework, particularly in terms of transparency and accountability. Burgan Bank was one of the first banks in the GCC and MENA region to adopt such best practice to promote the best interest of all of its stakeholders, clients, staff and shareholders.”

Finally, Sheikh Al-Sabah specifically noted that in this new spirit “the Board and Management honored the commitment made during the ‘Al-Shafafiya Investor Forum’ organized by KIPCO and where in fact the results were 12% over the original announcement.” He anticipated that the Bank would maintain the same pace of generating good results while continuing to realize satisfactory rates of growth for shareholder returns. He reminded everyone that “a promise given is a promise kept” at Burgan Bank. Sheikh Al-Sabah looked forward to the meeting of the upcoming ‘Al-Shafafiya Investor Conference’ in 2006 where the Bank’s expected performance would be highlighted with confidence.