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 Services and Group Strategy Head, Eng. Fahd Khalid Al-Muheziem.

Speaking at the event, Group Chief Financial Officer Abdul Karim Al-Samman stated that the financial performance of Kuwait Finance House Group through the third quarter of 2026 demonstrated strong growth in its core banking activities. He highlighted 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 and a decline in expenses.

He added that net operating income rose by 11.7 percent on an annual basis to reach approximately 1 billion Kuwaiti 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.

Al-Samman 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 late September. He emphasized that the spread between revenue and expense growth remained positive compared to the same nine-month period last year: operating revenues rose by 6.7 percent, while expenses declined 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.

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 549.8 million dinars, the provision balance stood at 1,049.7 million dinars in accordance with Central Bank of Kuwait directives, resulting in a provision margin of 499.9 million dinars.

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

Capital adequacy ratios were reported as follows: Common Equity Tier 1 (CET1) ratio at 13.2 percent, Tier 1 capital ratio at 15.4 percent, and total capital adequacy ratio at 17.2 percent. The corresponding regulatory minimum requirements were 10.5 percent, 12.0 percent, and 14.0 percent, respectively.

For his part, highlighting the operational performance, key developments in performance, and strategic achievements in the third quarter of 2026, Acting Head of International Banking Services and Group Strategy Head Fahd Al-Muheziem said, “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 resilience of KFH’s business model and the diversification of its activities, alongside the continued efficient execution of its strategy.”

He continued: “Our priorities are to focus on the customer, enhance integration among the group’s companies, accelerate the pace of digital transformation, and achieve 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 its customers’ expectations, and contributing to supporting Kuwait’s long-term development trajectory.

Al-Muxaimi added: “KFH has continued to develop its digital capabilities through the implementation of KFHOnline, smart branches, and advanced automated teller machines (ATMs), alongside updating the eCorp platform to enhance banking services provided to corporate clients. With the opening of the Qairawan Center, the number of group service centers in Kuwait has risen to three, which contributes to strengthening customer service across our regional business network.

In Bahrain, KFH achieved tangible progress in digital transformation, recording a 40 percent year-on-year increase in the number of active customers using digital channels. It successfully completed more than 150 banking services, bringing the total number of digital banking services to over 300. These initiatives contribute to enhancing integration among the group’s companies, elevating the customer experience, and improving operational efficiency.

Reaffirming these achievements, The Banker magazine ranked KFH first among the best-performing banks in Kuwait in its list of the Top 100 Arab Banks for 2026.

KFH continues 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 energy station 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 (Environmental, Social, and Governance), being named the Best Islamic Bank in the World by Global Finance, and receiving the Best Digital Bank in Kuwait award from MEED.

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

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

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

While the global economy has maintained its resilience, the IMF raised its forecast for global GDP growth in 2026 to 3.1 percent in October, while keeping its 2027 projection at 3.4 percent, supported by investments related to artificial intelligence.

The legislative and financial developments surrounding the recently issued Sovereign Sukuk Law have enabled Bayan Al-Kharafi to note that it contributes to establishing a framework for diversifying sovereign funding sources, broadening the investor base, and providing investment instruments compliant with Islamic Sharia principles. Meanwhile, the new housing finance law expands banks’ participation in residential financing and allows eligible beneficiaries to combine subsidized and non-subsidized financing for periods of up to 25 years. As implementation progresses, both frameworks will offer abundant opportunities for the bank.