Al-Majid: Capital Strength, Liquidity, and Proactive Planning Key Pillars to Enhance Banking Sector Resilience and Stability

Adel Al-Majid, Vice Chairman and Chief Executive Officer of Boubyan Group, affirmed that enhancing the competitiveness of the Kuwaiti banking sector in the coming years is linked to its ability to continue developing its business models, diversifying funding and revenue sources, improving operational efficiency, and leveraging opportunities provided by capital markets, modern technologies, and sustainable finance. These efforts will strengthen the sector’s role in supporting the national economy and consolidating financial stability in the long term.

He pointed out that recent economic and geopolitical changes have underscored the importance of maintaining strong capital and liquidity levels, diversifying credit portfolios across various sectors, and enhancing proactive risk planning. This includes stress-testing funding sources and deposit stability against different scenarios, thereby supporting the sector’s readiness and capacity to handle changes efficiently.

This statement was made during Al-Majid’s participation in a closed banking panel hosted by the Central Bank of Kuwait (CBK), in collaboration with Global Finance magazine. The session was attended by CBK Governor Bassel Al-Haroun and a group of senior executives from the Kuwaiti banking sector, who discussed the opportunities and challenges facing the Kuwaiti economy and financial sector, key transformations impacting the future of the banking industry, and the priorities needed to further strengthen the sector’s resilience and robustness at global, regional, and local levels.

Regarding the structural and operational priorities for the Kuwaiti banking sector over the next three to five years, Al-Majid clarified that the current phase requires improving the funding mix and diversifying revenue sources, alongside enhancing cost management efficiency and building broader capabilities to utilize capital market instruments. This will support banks’ ability to sustain growth amid economic and financial shifts.

He added that raising the efficiency of the banking sector requires continuing to enhance operational and cyber resilience in cooperation with the CBK, accelerating automation, and expanding the use of artificial intelligence (AI) in customer-facing services, internal operations, and decision-making. This should run parallel to developing frameworks for environmental, social, and governance (ESG) standards and sustainable finance.

On the topic of financing and liquidity laws, he emphasized that developing a deeper and more diversified local market for sovereign bonds and sukuk represents a crucial step toward supporting capital markets and enhancing liquidity management efficiency in the banking sector. These instruments provide banks with a local base of high-quality liquid assets, helping them meet regulatory requirements and reducing reliance on foreign sovereign instruments for liquidity management purposes.

He noted that Boubyan’s experience in the sukuk and financing issuance markets highlights the importance of a more efficient local market, which contributes to establishing a clear and specific benchmark for pricing issuances. This supports banks’ ability to diversify funding sources and access a broader base of investors locally and regionally.

Regarding the impact of technology on the sector’s future, Al-Majid stated that AI has become a business agenda reshaping customer experience, productivity, growth, and risk management. He explained that the most significant opportunities for banks lie in offering more accessible, faster, and tailored services to meet each customer’s needs, while also boosting employee productivity, operational efficiency, and regulatory functions.

He added that governance is a fundamental factor enabling financial institutions to safely expand their use of AI. He stressed that Kuwait’s real opportunity lies in cultivating a market capable of innovating in AI technologies while maintaining customer trust and operational resilience.

Regarding Bubiyan, Al-Majid clarified that the bank is adopting an integrated institutional program for artificial intelligence transformation, based on a multi-year roadmap that guides its transition from the digital leadership phase to building an AI-enabled institution, with a focus on customer experience, employee empowerment, and operational efficiency, within a clear framework of governance and responsible use.

In terms of sustainability, he pointed out that the Kuwaiti banking sector is witnessing a clear shift toward integrating environmental, social, and governance (ESG) criteria and sustainable finance into its strategies and financing and investment decisions. This is evident in the growth of investments in sustainable assets and projects, as well as in the progress made by several Kuwaiti banks in this field.

He explained that Kuwait possesses promising opportunities to expand the scope of sustainable finance, particularly in renewable energy projects, financing for small and medium-sized enterprises (SMEs), and financing for emission reduction pathways in the oil and petrochemical sectors, alongside the development of a local sukuk market that contributes to diversifying capital sources and activating the secondary market.

He emphasized that the development of the banking sector in the coming phase requires an integrated vision that combines financial resilience, operational efficiency, and responsible innovation, while leveraging available opportunities in capital markets, artificial intelligence, and sustainable finance, thereby enhancing the sector’s competitiveness and expanding its contribution to supporting economic growth and diversification in Kuwait.