Banking
From The Report: Kuwait 2022
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An easing of disruptions associated with the Covid-19 pandemic, a sustained increase in oil and gas receipts, and the rollout of a new law providing a framework for establishing digital offerings have given Kuwait’s banking sector renewed confidence that has been supported by the country’s wider economic recovery. Indeed, with real GDP returning to growth in 2021 and expected by the IMF to reach as high as 8.7% in 2022, credit and profitability look set to see further expansion. The sector is notable for its high liquidity and strong capitalisation, both of which helped it navigate the uncertainties associated with the pandemic and other global headwinds. Government-led pandemic amelioration and recovery measures helped support depositors and banks, a trend reinforced by the stable rate of deposits from the retail sector and government-related entities observed during the second half of 2021.

This chapter contains an interview with Basel Al Haroon, Governor, Central Bank of Kuwait, and a dialogue with Sheikh Ahmad Duaij Jaber Al Sabah, Chairman, Commercial Bank of Kuwait; and George Richani, CEO, Al Ahli Bank of Kuwait.

Articles from this Chapter

Overview

Roadmap for growth: A successful response to the Covid-19 pandemic and the adoption of new, innovative technologies have fuelled a return to growth
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An easing of disruptions associated with the Covid-19 pandemic, a sustained increase in oil and gas receipts, and the rollout of a new law providing a framework for establishing digital offerings have given Kuwait’s banking sector a renewed confidence that has been supported by the country’s wider economic recovery. Indeed, with real GDP returning to growth in 2021 and expected by the IMF to reach up to 8.7% in 2022, credit and profitability look set to see further expansions. The sector is notable…

Analysis

The way forwards: Digitalisation accelerates amid new regulations for digital banks and cybersecurity requirements
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The Central Bank of Kuwait (CBK) introduced new guidelines in February 2022 for establishing digital banks. These regulations reflect Kuwait’s efforts to support banking innovation for future economic development and financial stability. The new guidelines are expected to help the country’s banking sector keep pace with developments in global financial services. The guidelines were issued after the CBK carried out a study of regulatory approaches to digital banks that included 40 digital bank…

Interview

Managing risks: Basel Al Haroon, Governor, Central Bank of Kuwait, on the country’s ability to weather potential financial crises
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Interview:Basel Al Haroon Where do you see potential for Kuwait’s banking industry in the coming years, and how do you expect lending to evolve amid rising interest rates? BASEL AL HAROON: Kuwait’s banking sector demonstrated its resilience during the global financial crisis and Covid-19 pandemic. The low interest-rate environment since 2020 and pandemic-related moratoriums have resulted in loan growth. As rates increase and borrowing becomes more expensive and therefore less attractive,…

Overview

Great expectations: Sheikh Ahmad Duaij Jaber Al Sabah, Chairman, Commercial Bank of Kuwait; and George Richani, CEO, Al Ahli Bank of Kuwait, on diversification and disruptive technologies
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Dialogue:Sheikh Ahmad Duaij Jaber Al Sabah and George Richani What more can local banks do to assist in Kuwait’s economic diversification, and which sectors have the most potential for accelerating diversification? SHEIKH AHMAD DUAIJ JABER AL SABAH: Banks are the backbone of Kuwait’s private sector and the economy. Although there is an economic diversification agenda in motion, the country is still dependent on hydrocarbons. Therefore, one of the things that banks can do to support economic…

Analysis

Tie-up trend: GCC banks consolidate to boost resilience against future crises
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The Gulf banking sector has witnessed an increase in mergers and acquisitions (M&A) in recent years, as lenders continue to deal with the economic headwinds associated with the Covid-19 pandemic. At the outset of the pandemic in the first quarter of 2020 it was anticipated that the economic slowdown and the associated fall in oil prices would accelerate the M&A trend among banks in the region, with most institutions expecting constrained profitability despite performing well on risk indicators. Pandemic…