Al-Saqr: 'National Bank' Continues Strong Performance Thanks to Diverse Business Model and Wide Geographic Reach

National Bank of Kuwait held its analysts and investors conference for the financial results of the third quarter and the first nine months of 2026. Isam Al-Saqer, Vice Chairman and Chief Executive Officer of National Bank of Kuwait Group, presented the business environment, key milestones, and achieved financial results, alongside local, regional, and global economic outlooks.

Al-Saqer began his remarks by highlighting the bank’s financial performance, noting that National Bank of Kuwait achieved a net profit of KD 481.7 million in the first nine months of 2026, compared to KD 467.4 million during the same period in 2025. He added that net operating income rose by 3.8% year-on-year to exceed KD 1 billion, emphasizing that this growth reflects the strength of the bank’s diversified business model and its wide geographical footprint, while also contributing to the bank’s robust performance despite challenges in the operating environment.

He pointed out that return indicators remained strong, with the return on average assets reaching 1.39% during the first nine months of the year, while the return on average shareholders’ equity stood at 13.9%.

On the strategic front, Al-Saqer reported that the bank continued to make significant progress in implementing its digital transformation plans and enhancing its innovation capabilities. During the third quarter of 2026, the scope of integrated digital services expanded to include more key products in the retail banking sector. This included the launch of Kuwait’s first fully integrated digital experience for loan applications, as well as the availability of opening bank accounts for children and the digital application and issuance of credit cards.

He stressed that diversifying the group’s business activities and revenue sources remains a key pillar of the bank’s strategy, leveraging its regional and international presence, its wealth management sector, and Boubayan Bank, the group’s Islamic banking arm.

Al-Saqer further explained that during the third quarter, the bank expanded its presence in the Gulf region by opening a branch in the Qatar Financial Centre, thereby strengthening relationships with clients in a market where National Bank of Kuwait has maintained a long-standing presence for many years.

Regarding sustainability, Al-Saqer confirmed the continued integration of Environmental, Social, and Governance (ESG) standards into the group’s business and operations. He noted that by September 2026, the bank had achieved 60% of its target of USD 10 billion in sustainable financing by 2030, reflecting efficient execution and the bank’s commitment to achieving long-term sustainable growth.

Looking ahead, Al-Saqer affirmed that the bank’s strong position and outstanding performance provide a solid foundation for continued growth and reinforcing National Bank of Kuwait’s market leadership. He clarified that the bank’s strong capital base and robust liquidity levels enable it to expand lending activities in tandem with economic recovery. Meanwhile, its established and trust-based relationships with the public and private sectors continue to cement the bank’s position at the forefront of financial institutions supporting Kuwait’s investment plans, infrastructure projects, and economic transformation.

Operating Environment

Regarding the Kuwaiti economy, Al-Saqer explained that economic activity in the country regained momentum after slowing down in the second quarter of the year. Oil production recovered significantly compared to previous low levels, although it remained below pre-conflict levels. The pace of its recovery in the coming period will depend on export conditions.

For its part, he noted that non-oil activity demonstrated greater resilience, supported by progress in implementing the development agenda and a noticeable recovery in the pace of tenders for public utilities, infrastructure, and energy sectors. Al-Saqr stated that the past period of the year saw tangible progress in legislative and economic reforms, adding that these developments, along with Kuwait’s strong financial position, received positive assessments from credit rating agencies, which helped stabilize the country’s sovereign credit ratings. He pointed to the approval and publication of the mortgage financing law in the Official Gazette, pending the issuance of its executive regulations shortly. Al-Saqr predicted that lending activity under the recently approved mortgage financing law would gradually grow, noting that the true growth potential would become evident in the longer term as more ready-to-distribute housing units become available. He added that, independently of the law’s scope, lending activity is expected to improve as more business is directed toward implementing infrastructure projects and developing these new cities.

Regarding project awards, Al-Saqr said that project award activity maintained its momentum, with the total value of awarded projects reaching approximately 3 billion dinars during the first nine months of 2026. The third quarter also attracted significant international investments into Kuwait’s infrastructure sector, which he considered a strong indicator of investor confidence in the country. He emphasized that investment activity prospects remain promising amid the continued issuance of more tenders and the expectation of additional project awards.

On a robust business model, Sugeeth Rongy, Chief Financial Officer of NBK Group, said the group continued to deliver strong financial and operational performance during the first nine months of 2026, despite ongoing economic uncertainty and escalating regional geopolitical tensions since late February. He affirmed that the resilience of the business model, diversified revenue streams, and the group’s geographic spread contributed to enhancing its ability to withstand challenges and maintain strong profitability levels. He clarified that the group achieved a net profit of 481.7 million dinars during the first nine months of the year, up 3.1% compared to the same period last year, while third-quarter net profit reached 156.9 million dinars, also up 3.1%, supported by stable operational performance and a relative decline in net credit loss provisions and impairment losses. Rongy added that net operating income rose to 1 billion dinars, a 3.8% year-on-year increase, driven by the strong contribution from non-interest income sources, which accounted for 25% of total operating income, reflecting continued good balance in the revenue structure. He noted that non-interest income grew by 14.2% to reach 251.4 million dinars, while fee and commission income increased by 11.9% to 181.6 million dinars, reflecting strong contributions from various business segments and markets in which the group operates.

Rongui stated that fee income growth was primarily driven by asset management, lending, and card activities. Card revenues in the third quarter benefited from increased travel and air traffic during the summer season. Additionally, foreign exchange trading profits of 40.7 million Kuwaiti dinars supported revenues, benefiting from improved transaction volumes and positive changes in exchange rates.

He noted that international operations and Islamic banking, the two main pillars of the Group’s diversification strategy, contributed approximately 39% of the Group’s total profits, reflecting the success of the Bank’s geographic and operational diversification strategy.

Rongui explained that the continued issuance of Kuwaiti dinar-denominated government treasury bills contributed to a gradual increase in the interest-bearing reserve ratio at the Central Bank of Kuwait (CBK), which had a positive impact on net interest income and net interest margin. He expressed the Bank’s hope that the continued issuance of debt instruments would allow it to deploy liquidity in higher-yielding assets at the CBK.

Regarding the balance sheet, he mentioned that the Group’s total assets reached 46.9 billion Kuwaiti dinars by the end of September 2026, representing a 4.5% year-on-year increase. Total loans and advances rose by 8.2% year-on-year to 28.2 billion Kuwaiti dinars. He clarified that loan growth was primarily driven by the Kuwaiti market, with contributions from overseas operations despite challenges posed by regional conditions. Customer deposits increased by 13.5% year-on-year, with growth coming from both the domestic and overseas markets, although Kuwait accounted for the largest share of this increase.

He affirmed that asset quality remained stable, with the non-performing loan (NPL) ratio staying at a low level of 1.29%. The NPL coverage ratio stood at 236%, reflecting the Group’s prudent approach to risk management and provision building.

Rongui pointed out that the Bank holds credit provisions amounting to 940 million Kuwaiti dinars, in accordance with CBK regulations, against expected credit loss requirements of 713 million Kuwaiti dinars. Thus, the provisions recorded on the balance sheet under CBK regulations exceed expected credit loss requirements by 227 million Kuwaiti dinars, providing a comfortable safety margin that enables the Group to absorb any potential negative impacts arising from current conditions.

He added that the Group maintained healthy liquidity levels in line with Basel III requirements, with a liquidity coverage ratio of approximately 163% and a net stable funding ratio of 107%, both exceeding the original minimum regulatory requirements.

Regarding the outlook, Rongui emphasized that the Bank maintains a cautiously optimistic view regarding the stability of the operating environment in general during the coming quarters, despite ongoing challenges.

He noted that loan growth forecasts for 2026 remain within the single-digit mid-to-high range, affirming that the overall quality of the National Bank of Kuwait’s credit portfolio remains strong.

Rongui predicted that recoveries recorded during the first nine months of 2026 would help reduce the net provisions charged against the full-year results.