Al-Ghanim: Banking Sector is a Key Partner for Development Projects and Supporting Economic Vision

Kuwait National Bank CEO Shahin Hamad Al-Ghanim affirmed that recent geopolitical developments have shown that resilience is no longer an option for the banking sector, but has become a fundamental component of banking strategy. He emphasized the importance of maintaining strong capital and liquidity levels, diversifying revenue sources, and continuously investing in technology and infrastructure, thereby enhancing banks’ ability to respond swiftly and effectively to economic and geopolitical changes.

This came during Al-Ghanim’s participation in a dialogue session organized by the Central Bank of Kuwait and hosted by Global Finance, where he addressed several key issues related to the future of the Kuwaiti banking sector, ranging from the implications of geopolitical developments, through digital transformation and artificial intelligence, and the development of capital markets, to sustainable finance and ESG standards.

Al-Ghanim clarified that crises should not be viewed solely as risks, but can also represent opportunities to rethink business models and accelerate economic diversification. He highlighted the role banks can play in directing financing toward productive sectors and projects that support long-term growth and enhance the Kuwaiti economy’s capacity to withstand changes.

Four Priorities for the Banking Sector

Al-Ghanim pointed out that the Kuwaiti banking sector faces four main areas that should be prioritized in the coming phase. The foremost is digital transformation and artificial intelligence, not only to deliver faster banking services, but to redesign the customer experience and improve operational efficiency.

He added that the second priority is risk management and enhancing operational resilience, especially in light of growing cyber risks and ongoing economic and geopolitical uncertainty. The third priority is strengthening financing for the private sector and development projects, supporting small and medium-sized enterprises (SMEs), and backing projects and sectors linked to economic diversification.

The fourth priority, according to Al-Ghanim, is the development of the local capital market. He explained that a deeper and more liquid domestic bond market would provide banks, companies, and investors with broader options for managing liquidity, financing, and investment.

He stressed that these priorities are built on a strong foundation enjoyed by the Kuwaiti banking sector, characterized by robust balance sheets, high liquidity levels, and strong capital ratios, providing a solid basis for the next phase of growth and development.

The Financing and Liquidity Law: A Step Toward Developing the Debt Market

Regarding the Financing and Liquidity Law, which allows for the issuance of sovereign bonds and sukuk up to $98 billion, Al-Ghanim viewed the legislation as a crucial strategic step for Kuwait. He emphasized that it serves not only as an additional tool for the government to meet its financing needs but also as a means to create opportunities for building a deeper and more efficient local debt market.

He explained that the regular and transparent issuance of sovereign bonds and sukuk can help establish a clear sovereign yield curve, providing a benchmark for pricing corporate and financial institution issuances and supporting price discovery mechanisms in the market. Al-Ghanim also noted that sovereign issuances will provide additional investment instruments for banks, investment firms, pension funds, and investors, thereby aiding in liquidity management, portfolio diversification, and expanding the investor base.

Al-Ghanim highlighted the particular importance of sukuk for Kuwait, given the strength of the Islamic finance sector locally and regionally. He stressed that issuance volume is not the sole factor; rather, a clear and regular issuance schedule and an active secondary market are fundamental in transforming the law from a mere government financing mechanism into a genuine catalyst for developing Kuwait’s capital market.

Artificial Intelligence: Innovation Must Be Trustworthy

On the topic of technology and artificial intelligence (AI), Al-Ghanim affirmed that the question is no longer whether the banking sector will use AI, but how it will be used responsibly and securely. He stated that NBK views AI as a tool capable of redefining the customer experience and enhancing operational efficiency, but its implementation must occur within a clear framework of governance, risk management, data protection, and cybersecurity.

Al-Ghanim revealed that the bank has already begun implementing AI in its banking services, citing the launch of “Bdr AI,” which enables customers to conduct various banking transactions through text or voice interactions in both Arabic and English. He stressed that the next phase requires a national regulatory environment that encourages innovation, alongside clear standards for data governance, privacy, cybersecurity, model testing, and monitoring, as well as transparency and accountability. He emphasized that true innovation in the banking sector is innovation that earns trust.

Sustainability: From Commitment to Opportunity

Regarding sustainability and sustainable finance, Al-Ghanim clarified that for NBK, sustainability is no longer merely a response to global trends or disclosure requirements, but has become an integral part of the bank’s approach to growth, risk management, and long-term value creation. He noted that the bank is integrating ESG principles into its strategy, operations, investment, and financing decisions, with a focus on funding projects and activities that deliver sustainable economic, social, and environmental impacts.

He pointed out that the bank has taken practical steps in this direction, including developing a sustainable finance framework, enhancing the integration of ESG criteria into investment decisions, and issuing Kuwait’s first sustainability sukuk. Al-Ghanim added that the next phase requires shifting from viewing “sustainability as a commitment” to treating it as an opportunity by leveraging sustainable finance to empower new companies and projects, support economic transformation, and create long-term investment opportunities.

He concluded by affirming that the banking sector plays a vital role in building a more diversified, resilient, and sustainable Kuwaiti economy by directing financing toward sectors and projects capable of supporting growth and strengthening the national economy in the long term.