Khaled Al-Shamlan: Flexibility, Innovation, and Sustainable Growth Are Key Pillars for the Future of Kuwait’s Financial Sector

Al-Shamalan’s remarks came during his participation in a roundtable discussion on banking and economic affairs, 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 in the presence of Central Bank Governor Bassel Al-Haroun, serving as a platform for constructive dialogue on the resilience of Kuwait’s banking sector, efforts toward economic diversification, sustainable growth, and the future of financial services amid rapid regional and global changes.

Commenting on the impact of recent geopolitical developments on the banking sector, Al-Shamalan emphasized that preparedness must be strengthened before disruptions occur, not during them. He noted that maintaining strong capital and liquidity levels, 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, disciplined liquidity, effective governance, and entrenched confidence. Latest financial soundness indicators show that the Kuwaiti banking sector maintains a capital adequacy ratio of 18.5% and a non-performing financing ratio of 1.6%, reflecting the strength of local banks.”

He further clarified that the concept of resilience today extends beyond traditional financial indicators to include diversified funding sources, cyber readiness, awareness of supply chain importance, scenario planning, and the ability to serve customers under various conditions.

Al-Shamalan affirmed that Bayan Al-Kuwait (The Finance House) integrates resilience into its business continuity plans and digital infrastructure to ensure the availability of critical banking and digital services even in adverse conditions. He noted that the group’s geographic diversity also supports sustainable growth and operational resilience.

Al-Shamalan pointed out that Kuwait’s banking sector has made significant progress in digital transformation and artificial intelligence, indicating that the next phase will depend on banks’ ability to enhance their efforts in leveraging capital, technology, and human resources to support the economy.

He noted that, according to the latest data from the Public Authority for Housing Welfare, more than 108,000 families currently have pending housing applications. He explained that the mortgage financing law will contribute to providing effective financing solutions that will accelerate the pace of housing project development and reduce waiting periods.

He also indicated that the law is expected to raise credit growth in the banking sector from its current level of 6–7% to approximately 8–9%, creating new growth opportunities and enhancing asset and liability management capabilities across the entire sector.

Commenting on the development of capital markets, Al-Shamalan clarified that Kuwait’s Financing and Liquidity Law has established a comprehensive framework enabling the government to obtain financing locally and internationally within a debt ceiling of 30 billion Kuwaiti dinars, with repayment periods extending up to 50 years.

He noted that the law’s importance lies not only in enabling the government to secure financing but also in its pivotal role in laying the foundation for a deeper and more efficient financial market, allowing the state to utilize and manage its assets more effectively.

He explained that sovereign bonds and sukuk play a central role in enhancing liquidity management and consolidating financial stability. They also contribute to building a local sovereign yield curve, which provides banks and companies with a benchmark for pricing and issuing debt instruments in the local market, reducing reliance on international markets.

Al-Shamlan also highlighted the strong demand for the Central Bank’s June 2026 issuances, where treasury bills and public debt notes worth KD 550 million were offered and fully subscribed across all tranches, reflecting investor confidence and underscoring the market’s significant potential for further development. He noted that the Government Sukuk Law would help expand Kuwait’s Islamic capital markets and attract a broader investor base.

Regarding technological innovation, Al-Shamlan emphasized that artificial intelligence is playing an increasingly vital role in the present and future of banking. He explained that while the pace of technological innovation is accelerating rapidly, the key 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 the quality of decision-making.

On the topic of sustainability, Al-Shamlan clarified that Environmental, Social, and Governance (ESG) standards have evolved from mere disclosure requirements into a core strategic component of governance, risk management, financing policies, and disclosures across the banking sector.

Al-Shamlan stated, “At Kuwait Finance House, Islamic financing standards align with sustainability principles by creating long-term value for society. ESG criteria are an integral part of our strategy, and we provide financing based on environmental and social risks, supported by board oversight and a dedicated sustainability management team. We also publish an annual carbon footprint report alongside our sustainability report. The Central Bank’s instructions on sustainable financing, introduced in 2022, have helped drive the sector toward enhanced disclosures and the implementation of board-approved ESG policies.”

Concluding his remarks, Al-Shamlan said, “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 economic development and long-term prosperity.”