Al-Shamlan: Flexibility, innovation, and sustainable growth are fundamental pillars for the future of Kuwait's financial sector
Shamlan made these remarks during his participation in the Banking and Economic Roundtable, hosted by the Central Bank of Kuwait in partnership with Global Finance magazine. The event brought together a select group of senior banking leaders to discuss developments in Kuwait’s banking sector, economic outlooks, and growth opportunities.
The roundtable was held with the participation of Basel Al-Haroun, Governor of the Central Bank of Kuwait, serving as a platform for constructive dialogue on the resilience of Kuwait’s banking sector, economic diversification efforts, sustainable growth, and the future of financial services amid rapidly evolving regional and global dynamics.
Commenting on the implications of recent geopolitical developments for the banking sector, Shamlan emphasized that enhancing preparedness must occur before disruptions strike, not during them. He noted that maintaining strong levels of capital and liquidity, diversifying funding sources, and implementing robust stress-testing frameworks and contingency plans are fundamental pillars for safeguarding long-term financial stability.
He added: “Thanks to the prudent oversight of the Central Bank, Kuwait’s banking sector boasts strong balance sheets, liquidity discipline, effective governance, and entrenched confidence. The latest financial soundness indicators show that the sector maintains a capital adequacy ratio of 18.5% and a non-performing loan ratio of 1.6%, reflecting the resilience of local banks.”
Shamlan also clarified that the concept of resilience today extends beyond traditional financial metrics to encompass diversification of funding sources, cyber readiness, awareness of supply chain importance, scenario planning, and the ability to serve customers under various conditions.
He affirmed that Kuwait Finance House integrates resilience into its business continuity plans and digital infrastructure to ensure the availability of critical banking and digital services even under adverse conditions. He noted that the group’s geographic diversification further supports sustainable growth and operational resilience.
Shamlan pointed out that Kuwait’s banking sector has made significant strides in digital transformation and artificial intelligence, noting that the next phase hinges on banks’ ability to leverage capital, technology, and human resources to support the economy.
He highlighted that, according to the latest data from the Public Authority for Housing Welfare, more than 108,000 Kuwaiti families currently have pending housing applications. He explained that the Real Estate Financing Law will help provide effective financing solutions that accelerate the development of housing projects and reduce waiting periods.
He also noted that the law is expected to boost banking sector credit growth from its current level of 6–7% to approximately 8–9%, creating new growth opportunities and enhancing asset and liability management capabilities across the sector.
Commenting on capital market development, Shamlan explained that Kuwait’s Financing and Liquidity Law has established a comprehensive framework enabling the government to secure funding both locally and internationally within a debt ceiling of 30 billion dinars, with repayment periods extending up to 50 years.
He emphasized that the law’s significance lies not only in enabling government access to financing but also in its pivotal role in laying the foundation for a deeper and more efficient financial market, empowering the state to utilize and manage its assets more effectively.
He clarified that sovereign bonds and sukuk play a central role in enhancing liquidity management and reinforcing financial stability. They also contribute to building a local sovereign yield curve, providing banks and corporations with a benchmark for pricing and issuing debt instruments in the domestic market, rather than relying on international markets.
Shamlan also highlighted the strong demand witnessed for the Central Bank’s issuances in June 2026, where treasury bills and sovereign sukuk totaling 550 million dinars were offered, with all tranches fully covered. This reflects investor confidence and underscores the significant potential for further development in the market.
He noted that the Government Sukuk Law will contribute to expanding Islamic capital markets in Kuwait and attracting a broader investor base.
Regarding technological innovation, Shamlan affirmed that artificial intelligence is playing an increasingly vital role in the present and future of banking. He explained that the pace of technological innovation is accelerating rapidly, yet the challenge lies in deploying these technologies safely and responsibly.
He added that maintaining and enhancing trust is a fundamental element for banks, noting that the success of artificial intelligence is measured by the value it adds to customers and its ability to improve efficiency and decision-making quality.
In the area of sustainability, Shamlan explained that Environmental, Social, and Governance (ESG) standards have evolved from mere disclosure requirements to a core strategic element within the governance framework, risk management, financing policies, and sector-wide disclosures in the banking industry.
Shamlan stated: “At Kuwait Finance House, Islamic finance standards align with sustainability principles by creating long-term value for society. ESG criteria are an integral part of our strategy, and we extend financing based on environmental and social risks, supported by board oversight and a dedicated sustainability management function. We also publish an annual carbon footprint report alongside our sustainability report. The Central Bank’s sustainable finance directives, in place since 2022, have driven the sector to enhance disclosures and implement board-approved ESG policies.”
Shamlan concluded by saying: “Building a sustainable banking sector requires a balanced approach that combines financial strength, responsible innovation, sound governance, and sustainable growth. These pillars will continue to support Kuwait’s long-term economic development and prosperity.”
