Banks Association: Kuwaiti Banks Enjoy Strong Financial, Capital, and Liquidity Positions Supporting Development

- Hamad Al-Marzouq:

- An advanced supervisory system under the Central Bank’s oversight is based on international standards for financial safety and risk management

- Continued growth in credit and deposits reflects the sector’s ability to channel resources toward financing economic activities

- Banks will continue to play their pivotal role in supporting the economy and financing development projects

Hamad Al-Marzouq, Chairman of the Board of Directors of the Kuwait Banks Association and Chairman of the Board of Directors of Kuwait Finance House, affirmed that the Kuwaiti banking sector enjoys strong financial positions and high levels of liquidity and capital adequacy, reflecting the robustness of its financial standing and its capacity to face various economic and financial challenges, while continuing its pivotal role in financing economic activities and supporting development and financial stability in Kuwait.

In a statement, Al-Marzouq noted that liquidity management in banks is based on the efficient deployment of financial resources and achieving a balance between holding liquid assets and meeting financing needs, in accordance with prudential regulatory requirements and established risk management frameworks. He emphasized that assessing liquidity levels requires looking at the overall portfolio of liquid assets, funding sources, and their stability, rather than focusing on a single line item in the balance sheet.

Al-Marzouq stressed that the Kuwaiti banking sector relies on an advanced supervisory system overseen by the Central Bank of Kuwait, which is based on implementing international standards for financial safety and risk management, including capital adequacy requirements, the Liquidity Coverage Ratio (LCR), and the Net Stable Funding Ratio (NSFR), alongside stress tests and continuous assessment of asset quality and funding stability.

He clarified that the strength of Kuwaiti banks’ financial positions is evident in their liquidity and capital adequacy levels, which exceed regulatory requirements with comfortable margins—a point previously confirmed by the Central Bank of Kuwait when announcing the stimulus and precautionary measures it adopted in March 2026.

He pointed out that these measures were part of a proactive regulatory policy aimed at enhancing the resilience of the banking sector and its ability to cope with economic and regional developments, while ensuring the continued flow of financing to the national economy. He affirmed that temporary adjustments to certain regulatory requirements do not, in themselves, indicate weakness in banks’ financial positions, but rather reflect the flexibility of prudential tools and their ability to respond to different economic conditions.

Al-Marzouq emphasized that the strength of the banking sector is not measured by changes in the volume of specific financial balances, but by the soundness of banks’ financial positions, the quality of their assets, the adequacy of their capital, the stability of their funding sources, the efficiency of liquidity and risk management, and their sustainable ability to meet obligations and continue providing the services and financing necessary for the national economy.

Regarding banks’ ability to continue their credit activities in the coming period, Al-Marzouq affirmed that Kuwaiti banks possess the necessary financial and operational flexibility to manage their resources and regulatory requirements efficiently. He noted that any future adjustments to prudential requirements are made within the framework of established regulatory policies, taking into account the need to maintain financial stability and the sustainability of banking activities.

He added that the continued growth in credit and deposits, according to the latest official data, reflects the banking sector’s ability to continue playing its role in financial intermediation, mobilizing savings, and channeling resources toward financing economic activities, thereby contributing to economic growth and meeting the financing needs of individuals, companies, and various productive sectors.

The president of the federation concluded his statement by emphasizing that the Kuwaiti banking sector possesses strong financial and supervisory foundations. The advanced levels it has achieved in capital adequacy, liquidity, and risk management reflect the success of the prudent supervisory approach adopted by the Central Bank of Kuwait, and enhance banks’ capacity to navigate economic changes and maintain their financial stability.