Kuwait Finance House: Revenue Growth and Profit Increase

Kuwait Finance House (KFH) held its analytical conference on the Group’s performance and results 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 for the Group and Head of Strategy, Eng. Fahd Khaled Al-Muhezaim.

Strong Growth

Speaking at the event, Group CFO Abdul Karim Al-Samman stated that KFH Group’s financial performance through the third quarter of 2026 demonstrated strong growth in its core banking activities. He highlighted key financial 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 a reduction in expenses.

Operating net income rose by 11.7% year-on-year to approximately KD 1 billion, while the cost-to-income ratio stood at 30.8%. Net profit attributable to shareholders increased by 6.2% to KD 523.4 million. The financing portfolio grew by 7.5% compared to the end of the previous year, reflecting the continued deployment of liquidity to finance customers.

Geographic Diversification

Al-Samman noted that the Group benefits from the geographic diversification of its operations. By the end of September, international operations accounted for approximately 38.6% of the Group’s financing and 49.6% of its deposits.

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%, while expenses decreased by 3.0% to KD 447.5 million. Consequently, the cost-to-income ratio improved by 3.1 percentage points to reach 30.8%.

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

Regarding liquidity indicators, Al-Samman stated that they remained comfortably above current regulatory minimums in September. The liquidity coverage ratio (LCR) reached 137.0%, and the net stable funding ratio (NSFR) stood at 120.7%, both exceeding the minimum threshold of 80% for each. The loan-to-deposit ratio in Kuwait was 84.3%, below the maximum limit of 100%.

Capital adequacy ratios were reported as follows: Common Equity Tier 1 (CET1) ratio at 13.2%, Tier 1 capital ratio at 15.4%, and total capital adequacy ratio at 17.2%. These figures exceeded the corresponding current requirements of 10.5%, 12.0%, and 14.0%, respectively.

Operational Performance

For his part, Acting Head of International Banking and Head of Strategy, Fahd Al-Muhezaim, highlighted operational performance, key performance developments, and strategic achievements during the third quarter of 2026. He stated that KFH 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 reflected the robustness of KFH’s business model and the diversification of its activities, alongside the continued efficient execution of its strategy.

Our priorities focus on customer-centricity, enhancing integration among group companies, accelerating the pace of digital transformation, and achieving qualitative growth, while adhering to a disciplined approach to risk and liquidity management. He expressed confidence in Kuwait Finance House’s (KFH) ability to continue delivering sustainable value to shareholders, meeting the aspirations of its clients, and contributing to the long-term development of Kuwait.

Al-Muheziem added: “Kuwait Finance House has continued to develop its digital capabilities through the implementation of KFHOnline, smart branches, and advanced ATMs, alongside updating the eCorp platform to enhance corporate banking services. With the opening of the Qairawan Center, the number of group service centers in Kuwait has risen to three, which helps strengthen customer service across our regional business network.

In Bahrain, KFH achieved tangible progress in digital transformation, recording a 40% year-on-year 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 enhancing integration among group companies, elevating the customer experience, and improving operational efficiency.

In recognition of these achievements, The Banker magazine ranked Kuwait Finance House 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 station infrastructure needs.

KFH continued to garner international recognition, including being ranked the top-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 Best Digital Bank in Kuwait award from MEED.

Regarding Kuwait’s economic outlook, temporary pressures stemming from regional tensions and oil supply disruptions are evident. In this regard, the International Monetary Fund (IMF) projects a contraction in Kuwait’s GDP for 2026, followed by a strong recovery in 2027, with expected GDP growth of 17.1%, as energy production and transportation are anticipated to return to normal levels. Meanwhile, 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.

In the monetary and banking environment, Kuwait’s inflation rate remained stable at 2.19% in July 2026. The IMF expects average inflation to remain moderate at 2.2% for 2026 and 2.4% for 2027. The Central Bank of Kuwait kept the discount rate unchanged at 3.5% in September.

Regarding legislative and financial developments, the recently issued Government Sukuk Law is expected to establish a framework for diversifying sovereign funding sources, expanding the investor base, and providing Sharia-compliant investment instruments. Meanwhile, the new Real Estate Financing Law expands banks’ participation in residential financing and allows eligible beneficiaries to combine subsidized and non-subsidized financing for tenors of up to 25 years.

As implementation progresses, the two frameworks will offer promising opportunities for Kuwait Finance House. The global economy, while maintaining its resilience, saw the International Monetary Fund raise its forecast for global GDP growth in 2026 to 3.1% in October, while keeping its 2027 projection at 3.4%, supported by investments linked to artificial intelligence.