Kuwait Finance House: Strong Growth in Core Banking Activities

Kuwait Finance House (KFH) held its analytical conference on the Group’s performance and results for the period through the end of the third quarter of 2026, with the participation of the Group’s Chief Financial Officer, Abdul Karim Al-Samman, and the Acting Head of International Banking and Head of Strategy, Eng. Fahad Al-Muheizim.

At the outset, Al-Samman stated that the financial performance of Kuwait Finance House Group through the third quarter of the year demonstrated strong growth in its core banking activities. He reviewed key financial performance indicators, noting that the results for the first nine months reflected an improvement in the operating profit base, supported by growth in financing and fee income alongside lower expenses. Net operating income rose by 11.7 percent year-on-year to reach approximately 1 billion dinars, while the cost-to-income ratio stood at 30.8 percent. Net profit attributable to shareholders increased by 6.2 percent to 523.4 million dinars.

The financing portfolio grew by 7.5 percent compared to its level at the end of the previous year, reflecting the continued deployment of liquidity to finance customers.

He noted that the Group benefits from the geographic diversification of its operations, with international operations accounting for approximately 38.6 percent of the Group’s financing and 49.6 percent of its deposits as of the end of September.

He added that the gap between revenue and expense growth remained positive compared to the same nine-month period last year. Operating revenues increased by 6.7 percent, while expenses decreased by 3.0 percent to 447.5 million dinars. Consequently, the cost-to-income ratio improved by 3.1 percentage points to reach 30.8 percent.

He also clarified that the regulatory provision balance remains higher than the expected credit losses under International Financial Reporting Standard (IFRS) 9. Against expected credit losses of 549.8 million dinars, the provision balance according to Central Bank of Kuwait directives stood at 1,049.7 million dinars, resulting in a provision margin of 499.9 million dinars.

Regarding liquidity indicators, Al-Samman confirmed that they remained comfortably above current regulatory minimums in September. The liquidity coverage ratio reached 137.0 percent, and the net stable funding ratio stood at 120.7 percent, both exceeding the 80 percent minimum threshold. The financing-to-deposits ratio in Kuwait was 84.3 percent, below the 100 percent maximum limit.

The Common Equity Tier 1 (CET1) ratio stood at 13.2 percent, the Tier 1 capital ratio at 15.4 percent, and the total capital adequacy ratio at 17.2 percent. The corresponding current regulatory requirements were 10.5 percent, 12.0 percent, and 14.0 percent, respectively.

For his part, Al-Muheizim highlighted during the meeting the operational performance, key developments in performance, and strategic achievements in the third quarter of 2026. He stated, “Kuwait Finance House entered the final quarter of 2026 from a position of strength, maintaining its status as the largest listed company on the Kuwait Stock Exchange by market capitalization as of September 30. The third-quarter results reflect the robustness of KFH’s business model and the diversification of its activities, alongside the continued efficient implementation of its strategy. Our priorities include focusing on the customer, enhancing integration among Group companies, accelerating the pace of digital transformation, and achieving qualitative growth, while adhering to a disciplined approach in risk and liquidity management.” He expressed confidence in Kuwait Finance House’s ability to continue delivering sustainable value to shareholders, meeting the expectations of its clients, and contributing to the long-term development of Kuwait.

Al-Muxaim added: “Kuwait Finance House (KFH) has continued to develop its digital capabilities through the KFHOnline application, smart branches, and enhanced ATMs, alongside updating the eCorp platform to strengthen banking services for corporate clients. With the opening of the Qairawan Center, the Group’s service centers in Kuwait have risen to three, contributing to enhanced customer service across our regional business network.”

In Bahrain, KFH achieved tangible progress in digital transformation, recording a 40% annual increase in the number of active customers using digital channels, and successfully automating more than 150 banking services, bringing the total number of digital banking services to over 300.

These initiatives contribute to strengthening integration among Group companies, elevating the customer experience, and improving operational efficiency. In recognition of these achievements, The Banker magazine ranked KFH as the top-performing bank in Kuwait in its list of the Top 100 Arab Banks for 2026.

KFH continued to support national initiatives with strategic impact, including a contribution of $13 million to the Kuwait Emergency Response Fund, as well as a planned contribution of $6 million to support power plant infrastructure needs.

KFH continued to garner international recognition, including being ranked first as the best-performing bank in Kuwait in The Banker’s Top 100 Arab Banks list for 2026, winning Euromoney Awards for Wealth Management and ESG Governance, being named the best Islamic bank in the world by Global Finance, and receiving the award for best digital bank in Kuwait from MEED.

Kuwait’s future outlook reflects temporary pressures stemming from regional developments and oil supply disruptions. In this regard, the International Monetary Fund (IMF) expects Kuwait’s GDP to contract in 2026, followed by a strong recovery in 2027 with projected GDP growth of 17.1%, as energy production and transportation are expected to return to normal levels.

While the pipeline of planned and unawarded projects in Kuwait, valued at $122.7 billion, presents promising long-term financing opportunities, the energy and gas sectors accounted for more than 80% of awarded project contracts in the third quarter.

Kuwait’s inflation rate remained stable at 2.19% in July 2026. The IMF expects average inflation to reach moderate levels of 2.2% in 2026 and 2.4% in 2027. The Central Bank of Kuwait maintained its discount rate unchanged at 3.5% in September.

The recently issued Government Sukuk Law is expected to establish a framework for diversifying sovereign financing sources, expanding the investor base, and providing Sharia-compliant investment instruments.

Meanwhile, the new housing finance law expands banks’ participation in residential financing, allowing eligible beneficiaries to combine subsidized and non-subsidized financing for terms up to 25 years. As implementation progresses, both frameworks will offer promising opportunities for KFH.

As the global economy maintained its resilience, the IMF raised its forecast for global GDP growth in 2026 to 3.1% in October, while keeping its 2027 projection at 3.4%, supported by AI-related investments.