Burgan Bank -Equity Report -02-07-2012

1Q12 earnings jump 48%YoY, offer positive surprise
Burgan Bank reported profit of KWD17.5mn for 1Q12, jumping 26%YoY and 90.3%QoQ, beating our expectations of KWD10.1mn by a substantial margin. Positive surprise came on the back of lower than anticipated provisions. The overall performance of the bank was also astounding underpinned by good growth in the top-line and the non-interest income.

Valuation update – Maintain BUY, fair value decreased by 9.4%
We have decreased our fair value for Burgan bank by 9.4% from WD0.524/share (adjusted for bonus) to KWD0.475/share post actualizing for 2011 and period roll over to 2012. We have increased our loans growth projections for 2012 by 19.2% and our net profit estimates by 4.1%. We foresee a year of substantial growth in loans and assets in 2012, on account of major acquisitions being carried out by the bank. Asset growth is then anticipated to normalize in later years. We have nevertheless