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National Bank of Kuwait

Investor Presentation
March 2023

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Disclaimer
THE INFORMATION SET OUT IN THIS PRESENTATION AND PROVIDED IN THE DISCUSSION SUBSEQUENT THERETO DOES NOT
CONSTITUTE AN OFFER OR SOLICITATION OF AN OFFER TO BUY OR SELL SECURITIES. IT IS SOLELY FOR USE AT AN INVESTOR
PRESENTATION AND IS PROVIDED AS INFORMATION ONLY. THIS PRESENTATION DOES NOT CONTAIN ALL OF THE INFORMATION
THAT IS MATERIAL TO AN INVESTOR. This presentation has been prepared by (and is the sole responsibility of) National Bank of Kuwait
S.A.K.P. (the “Bank”).
The information herein may be amended and supplemented and may not as such be relied upon for the purposes of entering into any transaction. This
presentation may not be reproduced (in whole or in part), distributed or transmitted to any other person without the Bank's prior written consent.
The information in this presentation and the views reflected therein are those of the Bank and are subject to change without notice. All projections,
valuations and statistical analyses are provided to assist the recipient in the evaluation of the matters described herein. They may be based on
subjective assessments and assumptions and may use one among alternative methodologies that produce different results and, to the extent that they
are based on historical information, they should not be relied upon as an accurate prediction of future performance. These materials are not intended to
provide the basis for any recommendation that any investor should subscribe for or purchase any securities.
This presentation does not disclose all the risks and other significant issues related to an investment in any securities/transaction.
Past performance is not indicative of future results. National Bank of Kuwait is under no obligation to update or keep current the information contained
herein. No person shall have any right of action against the Bank or any other person in relation to the accuracy or completeness of the information
contained in this presentation. No person is authorised to give any information or to make any representation not contained in and not consistent with
this presentation, and, if given or made, such information or representation must not be relied upon as having been authorised by or on behalf of the
Bank.
This presentation does not constitute an offer or an agreement, or a solicitation of an offer or an agreement, to enter into any transaction (including for
the provision of any services). No assurance is given that any such transaction can or will be arranged or agreed.
Certain statements in this presentation may constitute forward-looking statements. These statements 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. You are cautioned not to rely on such forward-looking statements. 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.

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Contents

Section 1 Overview of NBK

Section 2 Strategy and Business Overview

Section 3 Operating Environment

Section 4 Financial Performance Highlights

Section 5 Appendix

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NBK is Kuwait’s Leading Banking Group

Snapshot Financial snapshot

 Established in 1952 as the first local and home-grown GCC bank, and first USD million 2020 2021 2022
shareholding company in Kuwait
 The leading banking group in Kuwait in terms of assets, customer deposits and Total Assets 97,021 108,575 118,637
Background customer loans and advances
 More than 30% market share of assets in Kuwait
Loans, advances & Islamic financing 57,148 64,389 68,555
 Named the most valuable banking brand in Kuwait, and among the top 10 in the
region by Brand Finance
Customer Deposits 55,841 59,683 65,877

 Established by a group of leading Kuwaiti merchants, NBK has retained the same Total Equity 13,520 14,584 15,132
core shareholder base since its inception
 NBK’s shares are listed on the Kuwait Stock Exchange since 1984 with only one
Ownership Net Operating Income 2,739 2,938 3,297
shareholder holding owning more than 5% of the Bank’s share capital (PIFSS owns
5.74% as of December 2022)
 NBK’s market capitalization at 31 December 2022 was USD 26.6 bn. Net Profit attributable 804 1,183 1,662

Cost to Income (%) 36.7% 39.2% 38.2%

 The Bank’s core businesses are (i) consumer and private banking, (ii) corporate
banking, (iii) Islamic banking and (iv) investment banking and asset management
Operations Net Interest Margin (%) 2.21% 2.21% 2.30%
 The Bank operates across 13 countries with a predominant focus on the MENA
region.
NPL Ratio (%) 1.72% 1.04% 1.42%
Credit Ratings
Loan Loss Coverage Ratio (%) 220% 300% 267%
Rating Agency Long Term Rating Standalone Rating Outlook
Return on Average Equity (%) 7.0% 10.2% 14.3%
A1 a3 Stable
Tier 1 Ratio (%) 16.0% 15.7% 15.0%
A a- Stable

A+ a- Stable Capital Adequacy Ratio (%) 18.4% 18.1% 17.4%

Notes: Through out the investor presentation, the USD/KD exchange rate used is .30630 except where mentioned. The rates are based on the Central Bank of Kuwait’s closing exchange rates as of 31/12/2022. National Bank of Kuwait 4
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Regional and International Geographic Presence

London – 1 branch
Paris – 1 branch
Geneva – 1 branch
New York – 1 Branch

Shanghai – 1 branch

Kuwait – 67 branches
Iraq – 3 branches
Lebanon – 2 branches
Egypt – 53 branches Bahrain – 2 branches Singapore – 1 branch
UAE – 2 branches
KSA – 3 branches
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Key Strengths
High credit ratings and among the
A Leading market position in Kuwait
top brand values regionally

 NBK enjoys a dominant market share across various business

 NBK has one of the highest credit ratings in the MENA region
segments in Kuwait
 Named the most valuable banking brand in Kuwait and among
 The Bank has one of the largest and most diversified distribution
the top 10 in the Middle East by Brand Finance
networks, including its digital channels

Sound and consistent Only banking group in Kuwait to provide

financial performance both conventional and Islamic banking
 Following its consolidation of Boubyan Bank in 2012, NBK
 Long history of profitability, even throughout the global financial became the only banking group in Kuwait to offer both
crisis conventional and Islamic banking services
 Excellent asset quality with an NPL ratio standing at 1.42% at  This has allowed the Bank to leverage off the opportunities across
end-2022 both markets, particularly given the growing importance of Islamic
 Strong liquidity serving as a buffer in times of need Finance in Kuwait

Stable shareholder base and A strong regional and

strong management team international network

 Established in 1952 by a group of leading Kuwaiti merchants and  Operations in 13 countries, 7 of which are in the MENA region.
has retained the same core shareholder base since  The Bank continues to explore opportunities to expand
 NBK’s stable shareholder base is complemented by a strong and geographically with a primary focus on further strengthening
stable Board of Directors and a long-serving executive team with operations in MENA region
in-depth experience

Strong wealth management capability A well-defined sustainability strategy

 NBK has established a strong global wealth management

 NBK’s leadership is deeply committed to the bank’s sustainability
platform that builds on client accessibility in the region, offering
journey and views sustainability as integral to business
best-in-class product and services and a seamless client
performance
experience throughout our global network

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Contents

Section 1 Overview of NBK

Section 2 Strategy and Business Overview

Section 3 Operating Environment

Section 4 Financial Performance Highlights

Section 5 Appendix

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NBK’s Strategy

The Group’s strategy, which is based on two main pillars, focuses on defending and growing its leadership position in Kuwait whilst also
diversifying its business

 The Bank aims to (i) remain the primary banker for the leading local companies whilst continuing to be active in the
 Corporate mid-market sector;(ii) remain the bank of choice for foreign companies and continuing to serve at least 75% of those
Banking companies and (iii) maintain its current market share in trade finance (over 30%). To achieve the above, NBK will
Defend and Grow leverage off its different services, expand its coverage and broaden the range of products and services offered.
Digital Leadership Position
transformation in Kuwait
 NBK intends to expand its consumer customer base by focusing on profitable consumer segments (such as the
of the core  Consumer affluent and mass affluent segments) and by attracting new clients such as the SMEs.
Maintain excellence and
Banking  Through the above, the Bank aims to maintain its leadership position, maintain its focus on delivery of superior
market leadership position,
customer service experience and achieve the lowest cost of funds among Kuwaiti conventional banks.
to expand market shares
and to maintain discipline in
managing both risks and
 Within the private banking sector, NBK aims to continue to provide a unique proposition to high net worth clients in
costs
collaboration with its investment arm. NBK also aims to provide superior customer service through its highly
 Private Banking
experienced bankers. The Bank also aims to leverage off its existing brand and experience (particularly in
Switzerland) to provide access to leading funds and broaden its product portfolio.

 The Bank’s geographic diversification strategy is to leverage its fundamental strengths and capabilities, including its
 Expand Regional international reach and strong regional relationships, to build a regional platform and support growth in key markets.
Business
Presence  NBK focuses on markets with long-term potential through a combination of high growth economies, sound
diversification Geographical, and demographic trends and opportunities aligned with the Bank’s competitive advantages.
leveraging product and service
digital diversification
disruption
Includes expanding  Establish an  The Bank’s strategy, in relation to its Islamic subsidiary, is to differentiate it from other domestic Islamic banks
regional presence, Islamic Franchise through a clear focus on high net worth and affluent clients and large and mid-market corporate customers.
establishing an Islamic
banking franchise and
building a leading regional
 Build Regional
investment bank.  NBK looks to establish its business as a leading regional investment banking, asset management and brokerage
powerhouse in
Wealth operation and to leverage the Group’s strong regional position to cross sell these products across the MENA region.
Management

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Kuwait Operations

NBK Islamic Banking (Boubyan Bank 60.1% owned subsidiary)

 After a series of gradual share acquisitions since 2009, NBK’s stake in Boubyan bank reached
Corporate Banking Consumer Banking Private Banking 58.4% in 2012. Through Boubyan, NBK aims at diversifying its income stream, complementing its
product offering as well as targeting a new segment of clients.
 The size and market share development of Boubyan relative to other Islamic banks leaves
significant room for repositioning the bank and acquiring market share.
 Remain the primary banker for  Maintain leadership with  Continue to provide a unique
 NBK is committed to the future growth and transformation of Boubyan Bank and establishing a
local blue-chip companies largest market share and proposition to HNW
strong presence in the growing Islamic banking segment.
 Remain bank of choice among highest customer penetration  Provide access to best of
 The Bank’s transformation and strategy implementation is led by a highly proficient management
foreign corporations; serving  Maintain focus on customer breed international funds team with extensive regional banking experience, with key positions filled by NBK veterans aligned
75% of them active in the service leveraging NBK’s wealth with the NBK culture.

Kuwaiti market  Aim to attract new bankable management expertise

 Maintain current market share clients such as SMEs  Leverage NBK’s strong brand Market share of Assets and Customer Deposits
in excess of 30% in trade  Pioneer innovative products to acquire new clients and
finance and services utilizing the latest retain onshore relationships Assets CDs

 Increase market share in tools and technologies  Broaden the product portfolio 9.6% 10.0%
8.5% 8.9%
medium corporate segment  Proactive attrition management to accommodate growing 7.9% 8.2%
7.6%
 Focus on project finance  Meet evolving banking needs 6.5%
5.5% 5.7%
benefiting from NBK’s large demands
capital base
 Maintain asset quality

2017 2018 2019 2020 2021

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International Operations
London – 1 branch
Paris – 1 branch
Geneva – 1 branch  NBK’s international operations have been traditionally contributing 25% of the Group’s bottom line.
New York – 1 Branch
 NBK’s international presence is a differentiating factor for the Group, enabling better service and
strengthening client relationships.
 The Bank is focused on growing its business in existing and new markets; meanwhile, across the
international locations, the Bank’s focus is on:
• increasing its market share in Egypt
• building a regional powerhouse in wealth management
• servicing its corporate and private customers who are active internationally and growing its
business with international corporates active in the MENA region
 Within its international network, NBK is focused on managing risks and costs to improve efficiency
and achieve long-term cost savings and productivity gains.

Shanghai – 1 branch Revenue Trends (USD mn) Balance Sheet Trends (USD bn)

Net Operating Income Net Profit Segment Assets

Singapore – 1 branch 870 51.4

729 43.1
671
33.1
448
Egypt – 53 branches Kuwait – 67 branches 301
Iraq – 3 branches
Lebanon – 2 branches 163
Bahrain – 2 branches
UAE – 2 branches
KSA – 3 branches 2020 2021 2022 Dec-20 Dec-21 Dec-22

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Digital Transformation Strategy

We developed our digital agenda with strong ambitions

With a solid digital transformation strategy, we
are committed to our strong ambitions to be
relevant to our customers’ needs in the era of
new normal, to enhance efficiency and to Being and percieved as Building “next Establishing a digital
increase stakeholders’ value through our two- the digital leader and generation digital working environment –
trendsetter in Kuwait banking” to deliver the Building digital skillsets
pronged approach best experience to our - Digital tools to work
customers efficiently
Digital transformation of Digital Transformation programs across all segments

1. the core (comprehensive

program to transform our
(Consumer, Private , Corporate)

business in Kuwait) Leveraging the change through six main pillars

Business diversification Enhancing Existing Developing New Building New Digital

2. leveraging digital disruption
(our key markets outside Kuwait)
Channels Experience Channels Capabilities

Fully Digital Value New Way of Working Trendsetting

Proposition Innovation

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NBK Group ESG Strategy Framework

Capitalizing on our Investing in our Governance for
Strategy Responsible Banking
Pillars Capabilities Communities Resilience

To support the transition to a To drive sustainable business growth To deliver a positive impact on the To commit to the highest standards
Ambition sustainable economy and become a achieved through organizational communities we serve. of governance by embedding ESG
role model in our own transformation. resilience. across the Group.

 Support the transition to a low  Promote diversity, equity, and  Empower communities to achieve  Build and implement the highest
carbon economy by delivering on inclusion in the workplace. financial independence, confidence standards of ESG governance
our net zero ambitions.  Promote group-wide ESG and security. and accountability.
 Capitalize on sustainable transformation through enhanced  Continued and enhanced focus to  Enhance stakeholder
business opportunities and employee engagement and providing optimal customer engagement, emphasizing our
develop a best-in-class development programs. experience and service excellence. ESG narrative and
Sustainable Finance proposition.  Cultivate and retain local talent by  Support national development plans commitments.
Strategic  Develop economic, environmental,
 Engage with our clients to providing rewarding career to promote and nurture local talent.
Initiatives development opportunities. and social risk resilience.
accelerate their transition plans and  Expand our community investment
support them in achieving their net  Establish a digital and agile work efforts for optimal impact.
zero ambitions. environment.  Support equitable community and
 Embed ESG across our supply economic development.
chain.

UN SDGs

Enablers Digitalization & Innovation Governance Risk Management Collaboration Transparency & Communication Capacity Building Monitoring & Reporting

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Building A Leading Journey In ESG

ESG Awards and

Ratings

Carbon Disclosure
Project (CDP)
Score 2022

Aligned with National

and Global Frameworks

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2022 Key ESG Achievements

We measure our progress against well-defined metrics and targets to achieve the greatest impact.
Strategy Pillars Key Highlights
 Launched NBK Sustainable Financing Framework and received SPO by S&P Global.
 Developed a roll-out plan for sustainable products for 2023.
Responsible Banking  Achieved the LEED Gold Certification for NBK Kuwait new Headquarters.
 Committed to become carbon neutral by 2060 in line with the State of Kuwait's pledge to achieve carbon neutrality by 2060.
 Established interim goals to reduce its gross operational emissions by 25% by 2025 through increasing dependency on renewable and
clean energy solutions.
 Installed 12 EV charging stations at different levels of the multi-story car park attached to NBK’s green Headquarters.
 Approved the new Group ESG Strategy.
 Elected eleven board members for a three year term; including two additional Independent members – totaling four independent members,
one with extensive ESG experience.
Governance for  Elected first female Board Member.
 Integrated ESG metrics into the Board of Directors’ and Executive Management responsibilities, charters, oversight, and affairs.
Resilience  Joined the United Nations Global Compact (UNGC).
 Received our first CDP Score of ‘C’ for both the Climate Change and Forest categories for the Financial Services sector.
 Aligned our operational environmental footprint with GHG Protocol global framework.
 Constituent in Refinitiv AFE Low Carbon Select Index MENA.
 Launched new designs for all our cards with customer-tailored features, including design themes especially for the visually impaired.
 Launched the “Bankee” financial literacy program in public and private schools.
Investing in our  NBK Academy named “Best Youth Programme Initiative” by MEED (MENA Banking Excellence Awards) international magazine.
Communities  Received the “Job Replacement and Nationalization Award” on the GCC level. Nationalization rate currently stands at 75.1%.
 Committed KD 13 million for the expansion of NBK Children’s Hospital specialized in stem cell transplant, project to start 2023.
 Community Investments totaled KD 23 million in 2022, a 45% increase from 2021.

 Awarded “Best Bank for Diversity and Inclusion in Kuwait” from Euromoney.
 Women in workforce 43.6%, women in management 29.2%.
 Launched NBK RISE, a global leadership initiative designed to elevate women to more significant leadership roles.
Capitalizing on our
 Launched a new training and development approach titled “Ready for the Future” aimed at accelerating the Group’s digital strategy.
Capabilities  In 2022, each employee received an average of 5.7 hours of training.
 Named “Best Financial Innovation Lab in Kuwait 2022” by Global Finance for pioneering innovation in the country and the region.
 Fostering employee well-being, NBK partnered with Wara Hospital to provide specialized on-site medical advice to staff.

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NBK Sustainable Financing Framework

Expanding our sustainable financing activities in line with industry leading practices and standards.
NBK established a Sustainable Financing Framework to support and advance NBK’s goal to integrate critical ESG issues into the business, culture and
operations, thereby advancing the transition to a sustainable and low carbon economy and contributing to achieve New Kuwait 2035 vision.

Use of Proceeds Management of Proceeds

 Under this framework, an amount equivalent to the net proceeds from NBK’s  NBK’s Finance and Treasury teams will manage the allocation of an amount
sustainable financing instruments will be used to finance or re-finance, in part equivalent to the net proceeds of its Sustainable Financing Instruments to
or in full, Eligible Assets with social or environmental benefits: Eligible Assets using a portfolio approach.
 Green Assets, including but not limited to: Renewable Energy,  NBK will follow the process described in the Sustainable Financing Framework
Energy Efficiency, Sustainable Water, Green Buildings. along with its professional judgement, discretion, and sustainability expertise
 Social Assets, including but not limited to: Healthcare & Education, when identifying the Eligible Assets.
Access to Essential Services, Affordable Housing.

Project Evaluation & Selection Reporting

 NBK has established a Sustainable Financing Working Group to govern the  NBK commits to publish an allocation and impact report annually, and until full
selection and monitoring of the Eligible Assets in accordance with the eligibility allocation of the proceeds, and in the event of any material changes until the
criteria defined by the Sustainable Financing Framework. relevant maturity date.
 The Sustainable Financing Working Group will be chaired by a member of  NBK will request on an annual basis, starting one year after issuance and until
Senior Management and consist of senior members from Finance, Treasury, full allocation, an assurance report on the allocation of the Sustainable
Risk Management, Sustainability, and Investor Relations. Financing Instrument proceeds to eligible assets, provided by its external
auditor.

NBK Sustainable Financing Framework has been externally verified with a Second Party Opinion (SPO) by S&P Global to confirm alignment with the ICMA 2021 Green
Bond Principles, ICMA 2021 Social Bond Principles, ICMA 2021 Sustainability Bond Guidelines, LMA 2021 Green Loan Principles and LMA 2021 Social Loan Principles.

Use of Proceeds Strong Project Evaluation & Selection Aligned Management of Proceeds Aligned Reporting Aligned

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Contents

Section 1 Overview of NBK

Section 2 Strategy and Business Overview

Section 3 Operating Environment

Section 4 Financial Performance Highlights

Section 5 Appendix

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Overview of Kuwait
Overview Fiscal breakeven oil price*

100 98 100
 The State of Kuwait is a sovereign state on the coast of the Arabian
Gulf with a population of 4.6 million 90
88 89 90

 Kuwait is a constitutional monarchy, headed by His Highness the 80

74
80 80
72
Emir, Sheikh Nawaf Al-Ahmad Al-Jaber Al-Sabah 70 70
68 66

 Kuwait enjoys an open economy, dominated by the government 60 62 62 60

sector. Its economy is primarily dependent on the oil industry, but

50 50
has witnessed growing contribution from non-oil sectors
40 40
14/15 15/16 16/17 17/18 18/19 19/20 20/21 21/22 22/23 23/24
 Kuwait has one of the lowest industry breakeven oil prices in the
world and a fiscal breakeven lower than some other GCC countries,
making it more resilient to low oil prices. It has one of the world’s Key economic indicators
largest sovereign wealth funds and very low debt, which underpins
its investment grade sovereign credit rating Key Indicators 2022f 2023f

 Kuwait has a long-term policy vision under the banner of “Kuwait Sovereign Ratings A1 / A+ / AA (M / S / F)
Vision 2035”. It encompasses six strategic aims: increasing GDP
growth; encouraging the private sector; supporting human and Current Account $58.9bn $47.5bn
social development; promoting demographic policies; enhancing
Government Revenues* (% GDP) 52% 49%
and improving the effectiveness of government administration and
consolidating the country’s Islamic and Arab identity Public Debt* (% GDP) 5.4% 3.2%
* Excludes investment income and on a fiscal year basis

Sources: Central Bank of Kuwait, Central Statistical Bureau, Ministry of Finance, NBK estimates National Bank of Kuwait 17
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Kuwait’s Economy
Recent Developments Real GDP (% y/y)

 Oil sector output gains in 2022 (+7.8% y/y), coupled with consumer-led gains in Total Non-oil
the non-oil sector (+3.1%), are expected to have propelled headline GDP 10 10
growth to a more than ten year high of 7.8%.
5 5
 Looking ahead to 2023, headline growth could slow to 0.8%, largely on the 1.1
GDP Growth
back of OPEC-mandated oil production cuts, which will push Kuwait’s oil sector 0 0
GDP growth down to -1.1%. Non-oil activity is projected to return to trend
growth of around 3.2%, and should increasingly see incremental manufacturing -5 -5
gains following the full commissioning of the Al-Zour refinery in that sector.
-10 -10
 The government could register a fiscal surplus of 9.6% of GDP in FY22/23, 2014 2015 2016 2017 2018 2019 2020e 2021e 2022f 2023f
boosted by the rise in oil prices to an average of $100/bbl, but expenditures are
Public likely to rise to cover higher welfare spending and new capex projects.
Finance and  Inflation averaged 3.9% in 2022, up from 3.4% in 2021 on a combination of Private credit (change, % y/y)
Inflation stronger demand and continued supply chain disruptions. Price growth, should,
however, ease to 2.7% in 2023 on fading pent-up demand and supply 12 12
pressures and amid tighter monetary policy. Total 12m avg
10 10

 Consumer spending continued to range at elevated levels in 4Q22 (+16% y/y), 8 8

Consumer bringing the cumulative 2022 figure to almost KD42 billion, a 22% y/y increase, 6 6
Sector on robust demand supported by strong consumer confidence, employment
gains and decent wage growth. 4 4
2 2
 Domestic credit growth slowed to a still solid 7.7% y/y in December 2022, the 0 0
fastest yearly increase since 2015. Household and business credit increased Dec-19 Jun-20 Dec-20 Jun-21 Dec-21 Jun-22 Dec-22
by 9.1% y/y and 6.8% y/y, respectively. In 2022 the CBK hiked the discount
rate by a cumulative of 200 bps to 3.5%, and followed this up in January 2023
with another 50 bps increase to 4.0%. Further moves by the CBK are expected,
Real estate sales 12m average (KD mn)
Credit Growth
in line with anticipated US Fed rate hikes of possibly 75 bps in total in 1H23.
250 Commercial Residential Investment 300
 Deposits rose by 5.3% y/y in December, with private sector deposits (around
250
78% of total deposits) increasing by 6.6% y/y in the same period, while 200
government deposits rose by 18.2% y/y to KD3.3 bn. 200
150
 Real estate sales activity fell in December to KD210mn (-37.4% m/m; -6.8% 150
y/y) as pandemic-linked pent-up demand continued to fade and amid high 100
residential valuations. Sales totaled KD3.63bn in 2022, only slightly down on 100
Real Estate
Activity 2021’s figure of KD3.68bn. The outlook in 2023 should be reasonable, 50 50
supported by government efforts to provide financing, though tighter financial
conditions and continued high valuations could weigh on demand. 0 0
Dec-18 Dec-19 Dec-20 Dec-21 Dec-22
Sources: Central Bank of Kuwait, Central Statistical Bureau, Ministry of Finance, Refinitiv, NBK estimates National Bank of Kuwait 18
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Kuwait’s Banking Sector

Snapshot

 The Kuwaiti banking sector comprises 22 banks, including 11 domestic banks (five conventional, five Shariah-compliant and one specialized), and branches of 11 international banks
(10 conventional and one Islamic).
 The sector is well regulated by the Central Bank of Kuwait (“CBK”) with a number of regulations and supervisory norms to ensure the safety of the banking sector including through
strict supervision and imposition of prudential ratios, such as lending limits and concentrations, investment limits, liquidity and capital adequacy.
 The banking sector has demonstrated strong resilience and elevated levels of financial soundness over the past 10 years. In fact, the sector is very well capitalized, with an
average Capital Adequacy Ratio of 18% in 3Q22, 7.5% higher than the required minimum of 10.5%. Non-performing loans to total loans stood at 1.5% during the same period with the
coverage ratio (all provisions to gross non-performing loans) of 287.9%.

Key indicators (USD bn, end year) 1 Development of the Discount rate (%, end year)

180 200 3.5 3.5

Loans Deposits 180
160 3.0 3.0
140 160
140 2.5 2.5
120
120 2.0 2.0
100
100
80 1.5 1.5
80
60
60 1.0 1.0
40 40
20 0.5 0.5
20
0 0 0.0 0.0
2015 2016 2017 2018 2019 2020 2021 2022 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

Sources: Central Bank of Kuwait / Refinitiv

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1Loans refers to total credit facilities to residents and deposits refer to private resident deposits, all as reported by the Central Bank of Kuwait
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Dominant Kuwaiti Franchise

NBK is the leading banking group in Kuwait with a market leading position across its business segments

Total Assets (USD million) Customer Deposits (USD million)

National Bank of Kuwait 109,939 National Bank of Kuwait 60,433

Kuwait Finance House 72,027 Kuwait Finance House 52,453
Boubyan Bank 24,304 Boubyan Bank 18,575
Burgan Bank 23,388 Gulf Bank 14,228
Gulf Bank 21,672 Burgan Bank 13,758
Al-Ahli Bank of Kuwait 18,603 Al-Ahli Bank of Kuwait 12,937
Ahli United Bank 15,119 Ahli United Bank 10,281
Commercial Bank of Kuwait 14,180 Warba Bank 7,567
Warba Bank 11,835 Commercial Bank of Kuwait 7,007
Kuwait International Bank 10,364 Kuwait International Bank 6,815

0 20,000 40,000 60,000 80,000 100,000 120,000 0 10,000 20,000 30,000 40,000 50,000 60,000 70,000

Customer Loans & Advances (USD million) Net Profit attributable (USD million)

National Bank of Kuwait 65,198 National Bank of Kuwait 1,198

Kuwait Finance House 37,538 Kuwait Finance House 805
Boubyan Bank 18,225 Commercial Bank of Kuwait 181
Gulf Bank 15,989 Boubyan Bank 160
Burgan Bank 14,861 Burgan Bank 150
Al-Ahli Bank of Kuwait 11,197 Gulf Bank 139
Ahli United Bank 11,048 Ahli United Bank 103
Kuwait International Bank 8,208 Al-Ahli Bank of Kuwait 90
Warba Bank 8,177 Warba Bank 53
Commercial Bank of Kuwait 7,531 Kuwait International Bank 36
0 10,000 20,000 30,000 40,000 50,000 60,000 70,000 0 200 400 600 800 1,000 1,200 1,400

Sources: Bank’s annual reports. All data as of 31 December 2021 for Balance Sheet items and Income Statement Items.

Note: Kuwait Finance House, Boubyan Bank, AUB, KIB and Warba Bank are Islamic banks while Burgan Bank, Gulf Bank, Commercial Bank of Kuwait and Al-Ahli Bank of Kuwait are conventional banks.

The USD/KD exchange rate used is .30250. The rates are based on the Central Bank of Kuwait’s closing exchange rates as of 31/12/2021.
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Contents

Section 1 Overview of NBK

Section 2 Strategy and Business Overview

Section 3 Operating Environment

Section 4 Financial Performance Highlights

Section 5 Appendix

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Operating Performance & Profitability

Profitability (USD mn) Operating Income Composition (USD mn)

Net Operating Income Net Profit NII & NI from Islamic financing Non-interest income
3,297
3,297
2,938
2,739 2,938
2,739
25%
26%
24%
1,662

1,183
804 75%
76% 74%

2020 2021 2022 2020 2021 2022

Return on average assets (%) Return on average equity (%)

1.48% 14.3%

1.15%
10.2%
0.82%
7.0%

2020 2021 2022 2020 2021 2022

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Operating Performance & Profitability (cont’d)

2022 Op. income by type (%) 2022 Op. income by business line (%) Cost to income (%)
Others, 2% Consumer
FX, 5% Corporate,
& Private
14%
Banking,
Fees, 18% 30%
39.2% 38.2%
Inv Bkg & 36.7%
AM, 4%

Others, Islamic
5% Banking,
Net Interest 21%
Income,
75% Intern'l,
26%
2020 2021 2022

Net Interest Margin (%) Net Interest Margin Drivers

+0.32% -0.72%
2.30% +0.49%
2.21% 2.21%

2.21% 2.30%

2020 2021 2022 2021 Loans Others Deposits 2022

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Balance Sheet Parameters

Net loan portfolio (USD bn) Loans to assets (USD bn)
Net Loans Net loan growth YoY (%) Total Assets Loans/Assets

68.6 118.6
64.4 108.6

57.1 97.0

12.7%
58.9% 59.3% 57.8%

6.5%
5.7%

Dec-20 Dec-21 Dec-22 Dec-20 Dec-21 Dec-22

Loan exposure by sector (%) (as at 31 December 2022) Low loan concentrations (as at 31 December 2022) Assets by Type (as at 31 December 2022)

Goodwill and
other Other, 3% Cash and ST
Crude Oil & intangible funds, 15%
Gases, 7% assets, 1%
Manufacturing, CBK Bonds
Other, 12% Top 20 Customers and Kuwait
7% Inv.
securities, Tbills, 3%
Others
Financial , 16% Deposits with
8% 0%
15%
Real Estate, banks, 4%
19%
Trade &
Commerce, Construction,
6% 2%
Loans,
85% advances
Purchase of and Islamic
Personal, Securities, financing to
35% 4% customers,
58%

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Funding and Liquidity Positions

Funding Mix (Total Liabilities) Customer and FI Deposits (USD bn)
Customer deposits Deposits from other FIs Due to banks Other borrowed funds CDs Customer Deposits FI Deposits

12.2
12% 14% 13% 10.2
11% 9.6
11% 12%

65.9
55.8 59.7
67% 63% 64%

Dec-20 Dec-21 Dec-22 Dec-20 Dec-21 Dec-22

Loans to Customer and other FI Deposits Ratio (%) Overview of Investment Securities1 – USD 18.4 bn
As at 31 December 2022

87.4% 92.1% 87.8%

Other, 4%
Equities, FVPL
1% 5% Amortized
Cost
16%

Non-Gov't
Debt,
37% Gov't
Debt (non
Kuwait),
58%
FVOCI
79%

Dec-20 Dec-21 Dec-22

Notes:1Excludes investments in Central Bank of Kuwait Bonds and Kuwait Government Treasury Bonds National Bank of Kuwait 25
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Capitalization and Asset Quality

Total Equity1 Breakdown (USD mn) Prudent capitalization (%)
Tier 1 Tier 2
Share capital Statutory reserves Retained Earnings Other Reserves & Treasury Shares
18.4% 18.1%
17.4%
11,556 11,828
2.4% 2.4%
10,806 2.4%
3,066
3,511
3,103

5,063
4,349 4,523 16.0% 15.7% 15.0%

1,118 1,174 1,233

2,236 2,348 2,466

Dec-20 Dec-21 Dec-22 Dec-20 Dec-21 Dec-22

Prudent Provisioning (USD mn) Provisions and Impairments Charges (USD mn) Asset Quality Ratios (%)
Specific Provisions General Provisions Provisions for Credit Losses Other Impairment Losses Loan Loss Coverage Ratio NPL Ratio

2,703 805

94
2,244
2,068
300%
267%
2,155 433 220%
1,686 38
1,664 711

395 148 1.72%

1.42%
558 548 131 1.04%
404
17
Dec-20 Dec-21 Dec-22 2020 2021 2022 Dec-20 Dec-21 Dec-22

Notes:1Equity here refers to total equity attributable to the shareholders of National Bank of Kuwait S.A.K.P. National Bank of Kuwait 26
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Expected Credit Losses (ECL) 2022

Financial Statements ECL Disclosure (USDm) Total Gross Loans (USDbn)

Stage 1 Stage 2 Stage 3

31 December 2022 Stage1 Stage 2 Stage 3 Total
66.5 71.3

1% 1%
Loans, advances and Islamic
8% 9%
financing to customers 64,303 5,943 1,012 71,258

Contingent liabilities 12,406 2,140 39 14,585

91%
90%
Commitments (revocable and
irrevocable) to extend credit 24,504 3,804 0 28,308

ECL allowance for credit

Dec-21 Dec-22
facilities 553 552 780 1,885

ECL Allowance for Credit Facilities CBK Credit Provisions vs IFRS 9 ECL (USDm)

CBK Provision ECL* Excess over ECL

2,835

Stage 3
35% Stage 1 Stage 1 2,181
29% Stage 3 950
29%
42%
673

Stage 2 Stage 2
1,885
36% 29% 1,508

Dec-22 (USD 1,885m) Dec-21 Dec-22

Dec-21 (USD 1,508m)
* ECLs as per CBK guidelines
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Contents

Section 1 Overview of NBK

Section 2 Strategy and Business Overview

Section 3 Operating Environment

Section 4 Financial Performance Highlights

Section 5 Appendix

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Kuwait Selected Mega Projects

Project Sector Budget (KD bn) Scope Status

Underway: Bids have been received for Al Mutlaa Residential City Concrete UH Water Tanks. Public Building in
South Al Mutlaa City Construction 6.0 30,000 residential units, schools and other facilities
Mutlaa City (N6 & N9) project is complete.

Construction Underway: Infrastructure works completed. Project was in the execution stage as per latest update in August
Jahra & Sulaibiya Low Cost Housing City 0.5 Low cost housing project north of Kuwait City; 824 Hectares
2019. Construction works on an infrastructure package are completed.

Kuwait Environmental Remediation Environmental remediation project to address the Underway: Five zones has been awarded as part of the North and South excavation, transportation and
Oil & gas 0.65
Programme (KERP) environmental damage resulting from the Gulf War remediation projects with a combined value of KD 305 mn.

Clean Fuels Project Specification upgrade and expansion of 2 existing refineries Complete: Overall progress 100%. The project is currently under operation and the time for its shutdown
Oil & gas 3.70
(CFP) to produce 800,000 b/d mechanical maintenance is still unknown.

Underway: Construction works are progressing on the JPF IV Off-Plot Works project and it is expected to be
Jurassic Non Associated Oil & Gas Production of 120,000 b/d of wet crude and more than 300
Oil & gas 0.8 completed by 2024. Construction works are progressing and are expected to be completed by 2023 on the JPF 4
Reserves Expansion: Phase 2 million cubic feet a day (cf/d) of sour gas
& 5 Off-plot Works & Production Facilities: North Area Off-plot Works project.

Planning/Underway: FEED works completed. Project Engineering and Management Services for 6 years
Petrochemical Facility at Al-Zour Oil & gas 2.0 Petrochemical plant to be integrated with Al-Zour refinery contract has been awarded. KIPIC qualified 7 bidders for the main contract tender expected before end-2021.
The Fire Station and Training Center tender is yet to be issued.

Dual-fuel plant with a net power generation capacity of 778

North Shuaiba Power Plant Power & Water 0.4 MW and includes 3 desalination units with a capacity of 45 Bidding/Planning: Consultancy contract bid submission deadline in November 2021.
MIGD

Complete/Planning: P-1 is complete. Overall progress 55%. KAPP obtained approval to award the Transaction
1800 MW of power generation capacity and 464,100m3 /day
Al-Zour North (IWPP) – P2 to P5 Power & water 0.5 Advisory Services contract for P-2 & P-3; while request for main contract qualification is expected between 3rd and
of desalination capacity
4th quarter 2021. The P-4 & P-5 are under study.

Bidding/Planning: The client has received the request for qualification (RFQ) documents from interested
Al-Khairan Power & Desalination Plant Power and desalination plants; project involves three phases.
Power & water 1.0 developers for the contract to develop the power and water desalination plant. The main contract tender is yet to
(IWPP)
be issued.

3
Initial treatment capacity of 500,000 m /d. Plant may replace Underway (pending): The Construction works are progressing on the project and the time frame for its
Umm Al Hayman Waste Water (PPP) Power & water 0.5
Riqqa WWTP in future completion is unknown at this juncture.

Waste to energy facility; 50% of all the municipal solid waste

Kabd Municipal Solid Waste Project Power & water 0.3 On Hold: The project has been put on hold.
produced in Kuwait will be processed at the facility

Planning: Feasibility study for the project has been completed stating the PPP models is more economically
Kuwait Metropolitan Rapid Transit Transport 5.4 165 km transit line running across Kuwait.
viable than the traditional tendered approach.

Underway/Bidding: Overall progress at 41%. Construction works ongoing on Terminal. P-2 contract for landside
To increase the annual handling capacity of the airport to 20
Airport Expansion (New Passenger works is yet to be awarded. Crossroads contract bid submission deadline ended Jun-2021. The main contract
Transport 1.90 million passengers and new runways and infrastructure
Building) tender is yet to be issued on P-1 of Package 1. The Cargo City (Package 4B) is still in its initial stage of
expansion
development.

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Consolidated financials 2022 (USD million)

Income Statement (USD million) 2021 2022 YoY Growth (%) Balance sheet (USD million) Dec-2021 Dec-2022 YoY Growth (%)

Interest Income 2,158 3,094 43% Cash and short term funds 16,592 17,380 5%
Interest Expense 506 1,188 NM Central Bank of Kuwait bonds 2,710 2,877 6%
Net Interest Income 1,653 1,906 15% Kuwait Government Treasury bonds 1,361 691 (49%)
Murabaha and other Islamic financing income 744 939 26% Deposits with banks 2,890 4,865 68%
Loans, advances and Islamic financing to customers 64,389 68,555 6%
Distribution to depositors and Murabaha costs 211 377 78%
Investment securities 16,033 18,396 15%
Net Income from Islamic financing 532 562 6%
Investment in associates 12 10 (17%)
NII and NI from Islamic financing 2,185 2,468 13% Land, premises and equipment 1,489 1,550 4%
Net fees and commissions 551 593 8% Goodwill and other intangible assets 1,898 1,746 (8%)
Net investment income 91 51 (44%) Other assets 1,201 2,566 NM
Net gains from dealing in foreign currencies 97 181 86% Total Assets 108,575 118,637 9%
Due to banks 13,381 13,118 (2%)
Other operating income 13 3 (75%)
Deposits from other financial institutions 10,237 12,213 19%
Non-interest income 753 829 10%
Customer deposits 59,683 65,877 10%
Net Operating Income 2,938 3,297 12%
Certificates of deposit issued 4,373 5,882 35%
Staff expenses 657 719 9% 4,135 4,060 (2%)
Other borrowed funds
Other administrative expenses 377 410 8% Other liabilities 2,182 2,355 8%
Depreciation of premises and equipment 111 127 14% Total Liabilities 93,991 103,504 10%
Amortisation of intangible assets 5 5 0% Share capital 2,348 2,466 5%
Proposed bonus shares 117 123 5%
Operating Expenses 1,151 1,261 10%
Statutory reserve 1,174 1,233 5%
Pre-provision profits (and impairments) 1,787 2,036 14%
Share premium account 2,622 2,622 0%
Provision charge for credit losses and impairment losses 433 148 (66%) Treasury share reserve 114 114 0%
Other reserves 5,180 5,271 2%
Operating profit before taxation 1,354 1,888 39%
Equity attributable to shareholders 11,556 11,828 2%
Taxation 111 155 39%
Perpetual Tier 1 Capital Securities 1,433 1,433 0%
Director’s remuneration 0 3 NM
Non-controlling interests 1,595 1,870 17%
Non-controlling interest 60 68 14% Total equity 14,584 15,132 4%
Profit attributable to shareholders of the Bank 1,183 1,662 41% Total liabilities and equity 108,575 118,637 9%
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Consolidated Statement Of Income (USD million)

USD million 2020 2021 2022

Interest Income 2,471 2,158 3,094

Interest Expense 871 506 1,188
Net Interest Income 1,600 1,653 1,906
Murabaha and other Islamic financing income 735 744 939
Finance cost and Distribution to depositors 267 211 377
Net Income from Islamic financing 468 532 562
Net interest income and net income from Islamic financing 2,068 2,185 2,468
Net fees and commissions 483 551 593
Net investment income 7 91 51
Net gains from dealing in foreign currencies 107 97 181
Other operating income 75 13 3
Non-interest income 671 753 829
Net Operating Income 2,739 2,938 3,297
Staff expenses 570 657 719
Other administrative expenses 322 377 410
Depreciation of premises and equipment 109 111 127
Amortisation of intangible assets 5 5 5
Operating Expenses 1,006 1,151 1,261

Op. profit before provision for credit losses and impairment losses 1,733 1,787 2,036

Provision charge for credit losses 711 395 17

Impairment losses 94 38 131
Operating profit before taxation 929 1,354 1,888
Taxation 84 111 155
Directors’ remuneration - 0 3
Non-controlling interest 40 60 68
Profit attributable to shareholders of the Bank 804 1,183 1,662

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Consolidated Statement Of Financial Position (USD million)

USD million 2020 2021 2022

Cash and short term funds 12,744 16,592 17,380

Central Bank of Kuwait bonds 2,711 2,710 2,877
Kuwait Government treasury bonds 1,511 1,361 691
Deposits with banks 3,354 2,890 4,865
Loans, advances and Islamic financing to customers 57,148 64,389 68,555
Investment securities 15,438 16,033 18,396
Investment in associates 17 12 10
Land, premises and equipment 1,394 1,489 1,550
Goodwill and other intangible assets 1,900 1,898 1,746
Other assets 804 1,201 2,566
Total Assets 97,021 108,575 118,637
Due to banks 9,965 13,381 13,118
Deposits from other financial institutions 9,563 10,237 12,213
Customer deposits 55,841 59,683 65,877
Certificates of deposit issued 3,000 4,373 5,882
Other borrowed funds 2,640 4,135 4,060
Other liabilities 2,491 2,182 2,355
Total Liabilities 83,501 93,991 103,504
Share capital 2,236 2,348 2,466
Proposed bonus shares 112 117 123
Statutory reserve 1,118 1,174 1,233
Share premium account 2,622 2,622 2,622
Treasury share reserve 114 114 114
Other reserves 4,604 5,180 5,271
Equity attributable to shareholders of the bank 10,806 11,556 11,828
Perpetual Tier 1 Capital Securities 1,431 1,433 1,433
Non-controlling interests 1,282 1,595 1,870
Total equity 13,520 14,584 15,132
Total liabilities and equity 97,021 108,575 118,637

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Contact

Contact Investor Relations Useful information

E: [email protected]
Download copies of NBK’s:
National Bank of Kuwait (NBK)
PO Box 95, 13001 Safat Kuwait • Financial statements
Al Shuhada Street, Block 7, Sharq • Earnings release
State of Kuwait • Annual report

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National Bank of Kuwait

Investor Presentation
March 2023

National Bank of Kuwait 34