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 Group’s performance and results for the first half of 2026, attended by Group Chief Executive Officer Khaled Al-Shamlan, Group Chief Financial Officer Abdulkarim Al-Samdan, and Acting Head of Strategy and Head of International Banking Eng. Fahad Al-Muheziem.

Group CEO Khaled Al-Shamlan opened the session by highlighting the Bank’s financial performance, stating: “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 first half of 2025. Earnings per share reached 18.86 fils for the first half of 2026, up 4.9% compared to the same period last year.”

Net financing revenues rose to KD 649.4 million in the first half of 2026, reflecting a 6.9% increase compared to the corresponding period last year. Total operating income, supported by growth across all key activities, reached KD 990.5 million, a 9.9% increase year-on-year.

The cost-to-income ratio improved to 30.6% in the first half of 2026, down from 34.3% in the same period last year, underscoring our commitment to efficiency and operational excellence. Net operating income for the first half of the year also rose to KD 687.9 million, achieving a 16.2% growth 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 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, up 11.5% compared to the end of the first half of 2025. Customer deposits reached KD 21.6 billion, a 9.4% increase compared to the first half of 2025, while total shareholders’ equity amounted to approximately KD 5.8 billion, an increase of 4.2% compared to the same period last year. The capital adequacy ratio stood at 17.47%, exceeding regulatory requirements, which confirms the strength and solidity of the Bank’s capital base.”

“Consistent with our ongoing commitment to enhancing shareholder value, the Board of Directors recommended the distribution of interim (half-yearly) 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. Our 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.”

“Moving forward, and despite recent geopolitical challenges, 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 CFO Abdulkarim Al-Samdan stated that KFH’s financial performance for the first half of 2026 demonstrated strong growth in its core banking activities, outlining key financial performance indicators.

Regarding the main financial results for the first half of 2026, Al-Samdan 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 has also become more productive due to the redeployment of excess liquidity.

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

Al-Samdan pointed out that international operations accounted for 39.4% of financing and 47.4% of deposits, emphasizing that a single geographic market does not represent 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-Samdan also clarified that the credit provision balance 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 according to Central Bank of Kuwait (CBK) directives reached KD 1,029.1 million, providing a margin of KD 504.0 million.

Regarding liquidity indicators, Al-Samdan explained that they reflect a comfortable margin, while management’s focus remains on the cost of liquidity and its economic deployment viability. The Liquidity Coverage Ratio (LCR) stood at 202.1%, the Net Stable Funding Ratio (NSFR) at 123.5%, and the funding-to-deposits ratio in Kuwait at 81.8%, compared to current CBK requirements of 80%, 80%, and a maximum of 100%, respectively.

Furthermore, the Common Equity Tier 1 (CET1) ratio was 13.5%, the Tier 1 capital ratio was 15.7%, and the total capital adequacy ratio was 17.5%, all exceeding 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 the ability to withstand stress, and providing appropriate distributions. The Group maintains a margin of approximately 350 basis points above the current minimum total capital requirement, providing the capacity to continue profitable growth.”

Economic Outlook

For his part, Group Head of Strategy and Acting Head of International Banking Eng. Fahad Al-Muheziem outlined the key features of the economic landscape in Kuwait, along with the strategic progress achieved by the Bank in the first half of 2026. He said: “In the middle of the year, the global economy continues to demonstrate its resilience. The International Monetary Fund (IMF) projects global economic growth of 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 disciplined fiscal and monetary policies.”

Regarding the outlook for the Kuwaiti economy and projects, Al-Muheziem stated: “The Kuwaiti economy is expected to trend toward gradual improvement following a period of calm in the first quarter. IMF indicators suggest growth recovery to reach 2.8% in 2027. Project activity serves as a key driver for this growth, following the awarding of contracts worth $2.0 billion during the second quarter, alongside a pipeline of major upcoming projects, which will boost economic activity and financing opportunities.”

On the monetary environment and banking sector, he noted that the Central Bank of Kuwait maintained the 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-Muheziem added: “Against this backdrop, KFH has maintained its strong position, underpinned by its robust financial balance sheet, prudent risk management, diversified revenues, and wide regional footprint. As we enter the second half of the year, KFH Group retains the flexibility and capacity to support customers and finance the real economy.”

“During the first half of the year, KFH continued to execute its strategic priorities, launching banking services via WhatsApp and enabling over 200 banking services through the ‘KFHOnline’ application. Additionally, KFH Group expanded the scope of savings solutions tailored for education, retirement, entrepreneurship, and homeownership.”

He affirmed that KFH continues to translate its digital strategy into tangible developments in customer experience and service execution speed and efficiency. In recognition of these efforts, the Bank won the ‘Best Digital Bank in Kuwait 2026’ award from Euromoney.

The Group also strengthened cooperation among its branches in Turkey, Bahrain, Egypt, and the United Kingdom by linking 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 awards, Al-Muheziem confirmed that KFH secured more than 25 awards and rankings during the first half of the year, recognizing its excellence across all banking sectors. These include the ‘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 Corporate Banking Bank in the World’ from Global Finance, alongside numerous other global recognitions that reflect the Bank’s leading global position.

Al-Muheziem concluded: “The results of the first half of 2026 demonstrated strong financial solvency, operational diversification, and execution discipline. KFH moves into the second half of the year backed by strong capital, a growing digital ecosystem, and clear priorities, with a firm commitment to supporting Kuwait’s development journey and achieving maximum sustainable long-term value for 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 also leverages its international network, comprising 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 its position as a trusted partner in driving economic growth across all its key markets.

Social Responsibility and Sustainability

Khaled Al-Shamlan emphasized that Kuwait Finance House translates 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. The bank has also expanded its strategic partnerships with ministries overseeing education, youth affairs, health, justice, and social affairs, enhancing 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.