Khaled Al-Shamlan: Strong financial performance of Kuwait Finance House confirms future growth prospects and its ability to handle challenges

Kuwait Finance House (KFH) held its analytical conference on the performance and results of the Group for the first half of 2026, attended by Group Chief Executive Officer Khaled Yousef Al-Shamlan, Group Chief Financial Officer Abdul Karim Al-Samdan, and Group Head of Strategy and Acting Head of International Banking Eng. Fahd Al-Makhzoum.

Opening the meeting, Khaled Al-Shamlan, CEO of KFH Group, highlighted the bank’s financial performance, stating that the bank achieved net profits of KD 363.1 million for the first half of 2026, representing a growth rate of 6.1% compared to the same period in 2025. Earnings per share reached 18.86 fils for the first half of 2026, up by 4.9% compared to the corresponding period last year.

Net financing revenues rose during the first half of 2026 to reach KD 649.4 million, reflecting a growth rate of 6.9% compared to the same period last year.

Total operating income, supported by growth across all key activities, reached KD 990.5 million, marking a 9.9% increase compared to the same period last year.

The cost-to-income ratio improved to 30.6% in the first half of 2026, down from 34.3% in the corresponding period last year, underscoring our commitment to efficiency and operational excellence.

Net operating income for the first half of this year also rose to KD 687.9 million, achieving a growth rate of 16.2% compared to the same period last year.

The growth achieved in our financial indicators during the first half of this year reflects the Group’s continued ability to deliver balanced growth, despite rapid changes and challenges facing the operating environment at both the regional and international levels.

Strategic Developments

Al-Shamlan added, “KFH has continued to strengthen its financial position, with total assets reaching KD 42.2 billion at the end of the first half of 2026, a 9.7% increase compared to the end of the same period last year. Financing receivables stood at KD 22.8 billion, an increase of 11.5% compared to the end of the first half of 2025.

Customer deposits reached KD 21.6 billion, up 9.4% compared to the first half of 2025, while total shareholders’ equity amounted to approximately KD 5.8 billion, a 4.2% increase compared to the same period last year. The capital adequacy ratio stood at 17.47%, exceeding regulatory requirements, which confirms the strength and robustness of the bank’s capital base.

In line with our ongoing commitment to enhancing shareholder value, the Board of Directors recommended the distribution of interim (semi-annual) cash dividends of 10 fils per share, thereby reinforcing shareholder confidence through the delivery of sustainable, long-term returns.”

Operational Efficiency and Innovation

Al-Shamlan stated, “Digital transformation is a cornerstone of KFH’s growth strategy. The bank’s platform currently processes over 600 million digital transactions annually, contributing to enhanced customer engagement, improved operational efficiency, and effective risk management.

In this context, the bank is investing in the qualification and future readiness of national talent, as evidenced by 100 employees obtaining specialized professional certifications through the ‘Injaz’ scholarship program.”

As we move forward, and despite recent geopolitical challenges, Kuwait Finance House (KFH) will continue to focus on its strategic priorities: enhancing asset quality, improving financial performance and group business integration, developing digital infrastructure, and elevating the customer experience, all within a robust risk management framework. We are committed to maintaining our strong financial position while seizing market opportunities to drive future growth.

Al-Shamlan concluded: “Our strong financial performance in the first half of 2026 reflects the effectiveness of our strategies and our ability to navigate challenges amid the rapid changes in the banking sector and the regional landscape.”

Strong Growth

Group Chief Financial Officer Abdul Karim Al-Samman stated that KFH Group’s financial performance in the first half of 2026 demonstrated strong growth in its core banking activities, highlighting key financial performance indicators.

Regarding the key financial results for the first half of 2026, Al-Samman noted that operating income grew at a faster pace than net profit attributable to shareholders, with a portion of this growth allocated to prudent provisions. The financial position also became more productive due to the redeployment of surplus liquidity.

The Group’s wide geographic footprint served as a pillar of resilience, as the operating platform now benefits from a broader and more diversified revenue base, supported by business volume, operational efficiency, and contributions from multiple markets. Management is focused on sustaining this level of returns through disciplined financing growth, effective funding and margin management, enhanced productivity, and conservative capital allocation.

Al-Samman pointed out that international operations accounted for 39.4% of financing and 47.4% of deposits, emphasizing that no single geographic market is the sole driver of the Group’s profits.

He stressed that this diversification of income sources creates sustainable value only when coupled with a highly efficient and productive operating platform, which the Group pursued by reducing operating expenses by 2.1% to KD 302.7 million.

Al-Samman also clarified that the balance of credit provisions is no less important than the provisions charged during the current period. The balance of expected credit losses under International Financial Reporting Standards (IFRS 9) amounted to KD 525.1 million, while the provision balance under Central Bank of Kuwait (CBK) directives reached KD 1,029.1 million, providing a margin of KD 504.0 million.

Regarding liquidity indicators, Al-Samman explained that they reflect a comfortable margin, while management’s focus remains on the cost of liquidity and the economic viability of its deployment.

The Liquidity Coverage Ratio (LCR) stood at 202.1%, the Net Stable Funding Ratio (NSFR) at 123.5%, and the Kuwait financing-to-deposits ratio at 81.8%, compared to current regulatory requirements of 80%, 80%, and a maximum limit of 100%, respectively.

Furthermore, the Common Equity Tier 1 (CET1) ratio reached 13.5%, the Tier 1 capital ratio stood at 15.7%, and the Total Capital Adequacy Ratio reached 17.5%, surpassing current requirements of 10.5%, 12.0%, and 14.0%, respectively.

He added: “We manage capital with the aim of supporting risk-adjusted return-based growth, enhancing resilience to stress, and providing appropriate distributions. The Group maintains a margin of approximately 350 basis points above the current minimum total capital requirement, enabling continued profitable growth.”

The Economic Landscape

For his part, Eng. Fahad Al-Muhezeim, Head of the Group’s Strategy and Acting Head of Group International Banking, outlined the key features of Kuwait’s economic landscape, along with the strategic progress the bank achieved during the first half of 2026. He stated, “Midway through the year, the global economy continues to demonstrate its resilience. The International Monetary Fund (IMF) projects global economic growth at 3.0% in 2026 and 3.4% in 2027, accompanied by a decline in inflation rates during 2027. Although trade growth may slow in 2026, future outlooks point to a gradual recovery supported by prudent fiscal and monetary policies.”

Regarding the outlook for Kuwait’s economy and projects, Al-Muhezeim said, “The Kuwaiti economy is expected to gradually improve following a period of calm in the first quarter. IMF indicators suggest growth will recover to reach 2.8% in 2027. Project activity serves as a key driver of this growth, following the awarding of contracts worth $2.0 billion during the second quarter, alongside a pipeline of major upcoming projects, which is boosting economic activity and financing opportunities.”

On the monetary environment and the banking sector, he noted that the Central Bank of Kuwait maintained its discount rate at 3.50% during the first half of 2026. While inflation remained at moderate levels of 2.2% in June, the IMF expects average inflation to reach 2.8% for 2026.

Strategic Priorities

Al-Muhezeim added, “Against this backdrop, Kuwait Finance House (KFH) has maintained its strong position, underpinned by its robust financial balance sheet, prudent risk management, diversified revenue streams, and extensive regional presence. As we enter the second half of the year, KFH Group retains the flexibility and capacity to support clients and finance the real economy.”

During the first half of the year, KFH continued to execute its strategic priorities, launching its banking services via WhatsApp and enabling more than 200 banking services through the KFHOnline app. Additionally, KFH Group expanded its range of savings solutions tailored for education, retirement, entrepreneurship, and home ownership.

He emphasized that KFH remains committed to translating its digital strategy into tangible improvements in customer experience, as well as the speed and efficiency of service delivery. In recognition of these efforts, the bank was awarded “Best Digital Bank in Kuwait 2026” by Euromoney.

The Group also strengthened cooperation among its branches in Turkey, Bahrain, Egypt, and the United Kingdom by integrating technical systems and harmonizing risk policies, which contributed to expanding its financing for infrastructure, energy, and real estate development projects. Based on these achievements, the bank won the “Best Islamic Project Finance Provider in the World 2026” award from Global Finance.

Regarding global accolades, Al-Muhezeim confirmed that KFH secured more than 25 awards and rankings during the first half of this year, recognizing its excellence across all areas of banking operations. These include “Best Islamic Bank in the World” from Global Finance, “Best Digital Bank in Kuwait” from MEED, “Best Private Banking Services Bank” from Euromoney, and “Best Islamic Bank for Corporate Banking in the World” from Global Finance, alongside numerous other international recognitions that reflect the bank’s leading global standing.

Al-Muxaim concluded: “The results for the first half of 2026 demonstrated strong financial solvency, operational diversification, and execution discipline. Kuwait Finance House is moving into the second half of the year backed by a robust capital base, a growing digital ecosystem, clear priorities, and a firm commitment to supporting Kuwait’s development journey and delivering maximum long-term sustainable value to shareholders.”

Market Position and Global Recognition

Khaled Al-Shamlan stated that Kuwait Finance House continues to consolidate its leading market position and exceptional business scale, reinforcing the Group’s regional distinction. The bank ranked first locally and 12th regionally on Forbes’ list of the top 100 public companies by market capitalization. Kuwait Finance House’s market capitalization reached KD 14.1 billion by the end of the first half of 2026.

The bank is also enhancing the utilization of its international network, which comprises more than 600 branches across 10 countries, to capture cross-border opportunities, finance strategic infrastructure projects, and support small and medium-sized enterprises, thereby strengthening Kuwait Finance House’s position as a trusted partner in fostering economic growth across all its key markets.

Social Responsibility and Sustainability

Khaled Al-Shamlan emphasized that Kuwait Finance House is translating its social responsibility programs into national initiatives with tangible impact. Since 2019, the bank’s partnership with the Ministry of Justice has contributed approximately KD 61 million to assist citizens struggling to repay their debts.

Furthermore, the bank has expanded its strategic partnerships with ministries overseeing education, youth affairs, health, justice, and social affairs, reinforcing its role as a national partner in achieving sustainable community development. In recognition of these efforts, Kuwait Finance House was awarded “Best Islamic Bank for Social Responsibility in the World 2026” by Global Finance magazine.