Khaled Al-Shamlan: Effective Partnerships and Growth Opportunities Lead the Future of Banking Between Gulf and Asian Countries

Khalid Youssef Al-Shamlan, Chief Executive Officer of Kuwait Finance House (KFH), participated in a panel discussion titled “Core Banking and Balance Sheet Partnerships” at the Asia-Gulf Economic Forum, held at the United Nations Conference Centre in Bangkok, Thailand, on the sidelines of the 2026 Annual Meetings of the International Monetary Fund and the World Bank Group.

During his participation, Al-Shamlan emphasized that banking cooperation between Gulf Cooperation Council (GCC) countries and Asia has become a tangible reality, driven by successful partnerships, growing trade flows, increasing interconnectivity among capital markets, and rising demand for Sharia-compliant financing solutions.

Al-Shamlan highlighted KFH’s experience as evidence of growing financial integration between the two regions. He noted that the Group’s successful issuance of $1 billion in five-year sukuk in January 2026 serves as a clear example of the impact of banking cooperation between the Gulf and Asia. He explained that leading Asian financial institutions, including Bank of China and Mizuho, participated in the issuance as joint lead managers, alongside Gulf financial institutions. The issuance attracted strong demand from investors in Asia and the Middle East, with oversubscription exceeding twice the size of the offering, reflecting growing investor interest in cross-border opportunities in Islamic capital markets.

Al-Shamlan stated, “The impact of the sukuk issuance extended beyond enabling KFH to diversify its funding sources; it also provided Asian institutions with broader access to international Islamic capital markets. This confirms that integration between Gulf and Asian capital markets is becoming a practical reality.”

On the bank’s international expansion strategy, Al-Shamlan clarified that KFH’s expansion into foreign markets is based on the Board of Directors’ vision to position the Group among the world’s top 100 banks and to build a more diversified and resilient financial entity.

He pointed out that the strategic acquisition of AlAhli United Bank in Bahrain (prior to its name change) significantly contributed to enhancing the Group’s presence in 10 countries, including Bahrain, Turkey, Germany, the United Kingdom, and Egypt. Al-Shamlan said, “This acquisition helped balance corporate and retail banking activities, diversify revenue sources outside the Gulf region, reduce concentration risks, and enhance profit resilience.”

He added, “With KFH’s market capitalization reaching approximately $50 billion, the Group continues to deliver strong financial performance, recording the highest net profit in the Kuwaiti banking sector and among companies listed on the Kuwait Stock Exchange.”

Regarding Sharia governance enabling expansion into international markets, Al-Shamlan stressed that differences in Sharia governance frameworks across countries do not hinder deeper financial integration between the Gulf and Asia. He noted that Sharia governance is an integral part of the bank’s operational model, citing KFH’s long track record of successful operations across diverse regulatory environments, including the UK, Germany, Egypt, and Turkey.

He further explained that the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) and the Islamic Financial Services Board (IFSB) contribute to establishing Sharia standards that enjoy international recognition.

He added that these frameworks, along with Kuwait Finance House’s extensive expertise in transforming traditional banking operations into Sharia-compliant business models, have enabled the group to successfully operate across multiple regulatory environments and effectively manage cross-border supervisory requirements.

Al-Shamlan also highlighted the growing global significance of Islamic finance, noting that the sector’s total assets exceeded $4.3 trillion in 2024, with projections indicating an increase to $6.9 trillion by 2029. The Gulf Cooperation Council (GCC) countries currently account for approximately 40% of global Islamic banking assets.

Regarding future cooperation prospects, Al-Shamlan pointed out that trade volume between GCC countries and Asia surpasses $516 billion annually, underscoring the importance of strengthening banking partnerships between the two regions. He explained that Asian banks offer opportunities to capitalize on rapidly growing trade flows, industrial ecosystems, and supply chain financing, while Gulf banks provide attractive investment opportunities in the region, deep local market knowledge, and expanding capital markets. He stated, “Economic ties between the two regions continue to strengthen.”

Financing of Gulf markets by Chinese banks has seen a notable increase in recent years, while remittance channels and trade remain key drivers of financial cooperation.

An integrated Islamic finance gateway

Al-Shamlan emphasized that establishing an integrated Islamic finance gateway requires more than facilitating capital flows; it necessitates providing mutual market access opportunities, enabling clients on both sides to benefit from investment opportunities, financing solutions, and institutional investor bases. He noted that sukuk markets can serve as a strategic bridge connecting sovereign entities and corporations in Asia with Gulf investors, while simultaneously enabling Gulf issuers to access a broad base of Asian capital. He added, “Kuwait Finance House’s international network enables the group to connect Gulf companies with Asian suppliers and empower them to leverage growth opportunities in Asian markets by providing effective banking and financing solutions that support their cross-border operations.”

Enhancing interconnectivity among liquidity systems

On the prospects of linking regional payment and liquidity systems between the Gulf and Asia, Al-Shamlan considered the development of an integrated liquidity network a realistic and feasible future step. He clarified that enhancing interconnectivity among these systems would facilitate trade, improve cross-border capital flows, reduce transaction costs, and strengthen regional financial stability.

In this regard, he cited the success of the Gulf Payments System (Afaq), which links the six central banks of the Gulf Cooperation Council (GCC) member states and dozens of participating financial institutions, considering it a solid foundation for launching into broader horizons of financial integration.

The Government Instruments Law Opens New Horizons

Al-Shamlan welcomed the Kuwaiti Government Instruments Law, describing it as an important development for local capital markets and regional financial cooperation. He clarified that this legislative framework would help diversify funding sources, establish a sovereign yield curve for sukuk, enhance pricing transparency, increase market liquidity, and provide additional Sharia-compliant investment opportunities for investors in GCC and Asian countries. He added that the law would contribute to supporting cross-border investment flows and strengthening liquidity management capabilities within the Islamic finance system.

Regarding the future of Gulf-Asian banking cooperation, Al-Shamlan emphasized that the success of such cooperation is measured by tangible economic outcomes, not by the number of signed agreements. He said, “I look forward, over the next five years, to seeing greater growth in trade volume, deeper financial ties, and increased levels of joint financing between Gulf and Asian banks.”

He pointed out that Asian markets are experiencing rapid growth, and the volume of trade between the Gulf and Asia exceeds $516 billion annually. Al-Shamlan noted that infrastructure projects in GCC countries, valued at approximately $1.7 trillion by 2030, offer extensive opportunities for cooperation in energy, logistics, transport, digital infrastructure, and data centers.

Al-Shamlan concluded by stating, “The true benchmark for success lies in increasing the number of jointly financed projects, strengthening interconnections among capital markets, and deepening economic integration between the GCC and Asia.”