Al-Watani's results in the first half reflect its ability to achieve sustainable performance under all circumstances

Isam Al-Saqer, Vice Chairman and Chief Executive Officer of National Bank of Kuwait (NBK) Group, confirmed that the Group continued to deliver strong financial and operational performance in the first half of 2026, benefiting from the strength of its diversified business model and wide geographic footprint. This enabled the Group to maintain growth momentum and enhance its operational resilience amid an economic and geopolitical environment characterized by high levels of uncertainty.

Speaking on the sidelines of the First Half 2026 Analyst Conference, Al-Saqer stated that the Bank’s results for the first six months of the year reflect the resilience of the Group’s diversified business model and its ability to achieve balanced and sustainable performance under various conditions. He emphasized that diversification remains a key priority for the Group, supported by its strong presence in regional and international markets. Meanwhile, National Wealth and Boubyan Bank, the Islamic banking arm of NBK Group, continued to support the Group’s efforts to diversify its growth sources.

Strategically, Al-Saqer noted that the Group remains focused on advancing its digital transformation agenda and enhancing its innovation capabilities by continuing to develop its digital channels, expanding mobile banking services, and offering a broader range of banking solutions to customers. He pointed out that the Group updated its Environmental, Social, and Governance (ESG) strategy this year to better align with evolving market trends and leading sector best practices. The Group also continued to increase its sustainable asset base, achieving 60% of its targeted $10 billion sustainable financing goal by 2030. Additionally, it issued a new sustainable financing framework to further enhance its ability to support clients in their sustainability journeys.

Regarding capital and dividends, Al-Saqer affirmed that the Group’s capital position remains strong, continuing to support its strategic objectives and growth aspirations. He noted that NBK successfully maintained a disciplined and rewarding dividend policy, based on prudent capital management that ensures strong levels consistent with regulatory requirements and supports its long-term growth strategy. This approach reflects the Group’s ongoing commitment to enhancing shareholder value, while striking a careful balance between dividend distributions and maintaining the financial strength and resilience necessary to support future growth.

Looking ahead, Al-Saqer emphasized that the Group remains well-positioned to build on its momentum and strengthen its leadership in the local market, supported by its solid foundations, robust balance sheet, and diversified operational model. He added that its trusted relationships with the public and private sectors provide important opportunities for the Group to play a leading role in Kuwait’s investment plans, infrastructure projects, and economic transformation programs. Diversification will remain a central pillar of the Group’s strategy, alongside continued investment in digital capabilities, innovation, and sustainability, to support sustainable growth and enhance long-term shareholder value.

On the housing finance law, Al-Saqer clarified that, in light of recent geopolitical developments, no further updates have been received regarding the law. He added that the latest draft of the law was submitted to the Council of Ministers after review by the Office of Fatwa and Legislation, and is now in the final stages of the legislative issuance process. The draft has also been referred to the Central Bank of Kuwait for review as the regulatory authority. He noted that the Minister of State for Housing Affairs recently reaffirmed the government’s commitment to moving forward with this file, describing it as a crucial step toward enacting the residential housing finance law. Enacting such a law would be a significant move for the Kuwaiti economy, as it would support economic activity, provide broader financing solutions for citizens, and stimulate several sectors linked to housing activity.

Regarding the Kuwaiti economy, Al-Saqer explained that after a temporary moderation in economic activity following the partial easing of geopolitical tensions, the recent escalation poses a pressure factor on the economic recovery trajectory. He added that after the strong momentum at the beginning of the year, project award activity moderated in the second quarter, with total awarded projects reaching approximately KD 2.3 billion in the first half of 2026. Although he anticipated that timelines for the execution of some projects may be delayed until the second half of 2026 and 2027, he stressed that the government’s continued commitment to infrastructure development and advancing reforms linked to Kuwait Vision 2035 would support a gradual recovery in project activity as conditions normalize.

On the level of the Gulf Cooperation Council (GCC) countries, Al-Saqer affirmed that despite ongoing geopolitical risks amid existing disruptions, GCC economies have demonstrated their resilience. They possess a strong position that enables them to handle external shocks, supported by robust sovereign financial positions, ample liquidity, and strong financial safety margins.

For his part, Sujit Rongy, Chief Financial Officer of NBK Group, confirmed that the Group succeeded in the first half of 2026 in affirming the strength of its operational and financial performance despite the geopolitical challenges facing the region. He noted that the year began with considerable optimism regarding business growth prospects in Kuwait and international markets. However, the sudden and sharp escalation of geopolitical tensions since late February led to instability in the regional operating environment and increased uncertainty at the macroeconomic level, as the full repercussions of these developments have not yet materialized.

Rongy added that the Group’s performance in the first half of the year reflects its resilience and adaptability, leveraging its diversified business model to ensure uninterrupted operational continuity even under the most difficult, complex, and volatile conditions. He clarified that the Group achieved a net profit of KD 324.8 million in the first half of 2026, an increase of KD 9.5 million compared to the same period last year, representing growth of 3.0%. Furthermore, the net profit for the second quarter exceeded the level recorded in the corresponding period of 2025 by 4.5%, supported by strong operational performance and lower tax costs, which helped mitigate the impact of the relative increase in net credit loss provisions and impairment losses.

Rongy explained that the continued issuance of Kuwaiti dinar-denominated government treasury bonds contributed to the gradual rise in interest-bearing reserves at the Central Bank of Kuwait, which had a positive impact on net interest income and net interest margin. He stated that NBK looks forward to the continued issuance of debt instruments, which would allow the deployment of liquidity into assets with better yields at the Central Bank of Kuwait.

He noted that total loans and advances recorded growth of KD 2.3 billion, or 8.9% year-on-year, reaching KD 27.8 billion at the end of the first half of 2026. Growth from the beginning of the year stood at 3.6%, reflecting the impact of adverse geopolitical developments in the region since late February. The growth recorded in the second quarter was primarily driven by the expansion of the corporate lending portfolio in Kuwait and across the Group’s international business network. Additionally, securities investments rose to KD 9.2 billion, representing a year-on-year growth of 6.4%.

Rongy pointed out that customer deposits, excluding those from banks and financial institutions, reached KD 27 billion, recording a year-on-year growth of 13.1%. He emphasized that the stability of the funding base recently, despite regional disruptions, reflects the high level of confidence customers have in the Bank, supported by established, long-term relationships, as well as a strong brand and high credit ratings.

Regarding asset quality, Rongy clarified that the Bank has not received any unusual deferral requests since the outbreak of the war. He added that, in the normal course of business, limited requests may arise from time to time, but the past months have not witnessed any unusual developments in this regard. He further noted that non-performing loan indicators improved due to the Bank’s conservative provisioning policy, which allowed for the off-balance-sheet treatment of fully provisioned loans.

He indicated that the first half of 2026 results also benefited from the release of a portion of tax provisions following the settlement of several tax assessments. He expects the impact of these settlements to extend to the full-year results, leading to an effective tax rate lower than usual in 2026. After this effect expires, the core tax rate is expected to return to a range of 16% to 17%.

Rongy concluded by affirming that the Group maintains a cautiously optimistic outlook for the remainder of 2026, despite ongoing challenges and uncertainty. He stated that loan growth expectations remain in the mid-to-high single digits, supported by the strength of the pipeline across the Group’s network in 13 countries and a strong, diversified portfolio of credit opportunities at both the regional and international levels.