Investor Presentation
14 May 2007
13:20 hrs
www. shafafiyah.com.kw
1
Agenda of Presentation
2006: Key Milestones
2007: Road Map
Performance Highlights: Last 5 Years
2007: Destination
2
2006: Key Milestones

Record profits at US$ 101 million over 25% of 2005 US$ 81
million

BIS ratio at 28.3% and balance sheet liquidity at 38%

ROAE at 23.5% and ROAA at 5%. Operating expense to
operating income low at 30.4% (2005: 27%)

Assets under management exceed US$ 6.4 billion
3
2006: Key Milestones Cont/…

Improved franchise value

Expansion of financial services network
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
Obtained investment grade rating Baa3 from Moody’s
Capital Intelligence upgraded foreign currency rating to BBB+
Commercial banking license obtained in Syria. Syria Gulf Bank (SGB) will be
operational 2Q 2007. UGB owns 24% equity stake and will manage SGB
United Gulf Financial Services, Qatar operational since June 2006
Management of Bank of Baghdad, Iraq/new business initiatives launched
Tunis International Bank Representative Office in Libya operational
Manafae Investment Company in Kuwait operational
MOU signed to establish joint venture investment company in Tunis
MOU signed to establish an investment company in Abu Dhabi
Improved funding mix
–
–
Raised Lower Tier 2 US$ 100 million floating rate notes with maturity of 10
years
Increased short term interbank lines from US$ 800 million (December
2005) to US$ 1.1 billion resulting in enhanced credibility and liquidity
4
Our People
5
Agenda of Presentation
2006: Key Milestones
2007: Road Map
Performance Highlights: Last 5 Years
2007: Destination
6
2007: 1Q Key Milestones
 Record 1Q07 profit of US$ 115.5 million including
exceptional gains of US$ 88 million on asset sales
 US$ 15 million gain on UPAC sale to hit 2Q07
 BIS ratio more than 30% and balance sheet liquidity in
terms of bank and call deposits at 25%
 Unrecognized (hidden) value increased to US$ 312
million
 Share price reflects exceptional performance
 Market capitalization in excess of US$ 1 billion
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2007: Road Map
Bank of Baghdad
new branches
planned in north
Syria Gulf Bank to
start commercial
operations/UGB
management
Algeria Gulf Bank to
expand Branch
network to 6
Investment
joint venture
company in Tunis
Investment
joint venture
company in UAE
Continued growth
of KAMCO wealth
management
Exits & Realizations:
Telecommunications
assets, UFK, UPAC
Fully
underwritten
5-year syndicated
facility
US$ 125 million
8
2007: Road Map Progress
CYPRUS
TUNISIA
SYRIA
IRAQ
PALESTINE
JORDAN
ALGERIA
LIBYA
EGYPT
KUWAIT
BAHRAIN
SAUDI
ARABIA

Bank of Baghdad – commercial bank, Iraq

KAMCO – asset management company, Kuwait

Jordan Kuwait Bank – commercial bank, Jordan
QATAR
UAE
OMAN
— Jordan Kuwait Bank, Branch in Cyprus
— Jordan Kuwait Bank, Branch in Nablus (Palestine)

Algeria Gulf Bank – commercial bank, Algeria

Tunis International Bank – commercial bank, Tunisia

UGB Securities – brokerage company, Bahrain

Syria Gulf Bank – commercial bank, Syria

United Gulf Financial Services Company (UGFS), Qatar

TIB representative office in Libya

Investment joint venture company in UAE (under formation)

Investment joint venture company in Tunis (under formation)

Investment company in Jordan (planned)

Investment company in Syria (planned)
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Agenda of Presentation
2006: Key Milestones
2007: Road Map
Performance Highlights: Last 5 Years
2007: Destination
10
Performance Highlights: Last 5 Years
1Q07
2006
2005
2004
2003
2002
Total Revenue
176
242
199
105
112
58
Operating Income
155
176
160
84
93
38
Shareholder’s Equity
497
489
376
280
260
211
2,350 1,687 1,388 1,187
939
US$ millions
Total Assets
Net Income
2,192
115
101
81
43
36
10
Return on Average Equity
24.4
23.5
24.7
16.0
15.4
4.9
Return on Average Assets
5.1
5.0
5.3
3.4
3.4
1.1
-
34.6
27.5
15
14
-
Book Value Per Share
61.9
61.0
48.9
36.6
34.1
27.9
Earnings Per Share (Basic)
14.4
12.8
10.5
5.67
4.74
1.3
%
Dividends
US Cents
11
Agenda of Presentation
2006: Key Milestones
2007: Road Map
Performance Highlights: Last 5 Years
2007: Destination
12
2007: Destination
Net Income
Return on Average Assets
In US$ Million
8.2%
195
5.3%
5.0%
101
81
36
43
2003
2004
3.4%
2003
2004
1.1%
10
2002
3.4%
2005
2006
2007E
Earnings Per Share
2002
2005
2006
2007E
Return on Average Equity
36.0%
24.1
In US Cents
24.7% 23.5%
12.8
15.4% 16.0%
10.5
4.7
5.7
4.9%
1.3
2002
2003
2004
2005
2006
2007E
2002
2003
2004
2005
2006
2007E
13
Projected vs Achieved Performance
Actual vs Projected Net Income
In US$ Million
195
Projected
Actual
81
42
43
2004
85
101
50
2005
2006
2007E
14
Thank You
www.ugbbah.com
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