Ahmed Al-Qutami to 'Al-Rai': Housing Competition Must Be Regulated for Cost, Risk, and Value

- Kuwaiti citizens are the primary beneficiaries of “mortgage financing” through non-traditional credit instruments

- Kuwaiti banks enjoy flexible credit capacity, strong capital bases, and robust liquidity

- “Mortgage financing” is a responsible tool to support state plans, drive banking growth, and stimulate the economy

- Our perspective on credit is long-term; therefore, we do not measure its surge by volume expansion alone, but by the sustainability of its growth

- NBK prepared early for housing competition with a competitive package of services and solutions that combine its financial, operational, technological, and liquidity strengths

- The slowdown in individual financing is linked to geopolitical developments and rising credit costs

- The core demand for individual financing remains in housing, cars, and consumer needs

- NBK does not pursue individual customers merely to increase its market share, but to achieve qualitative market growth

- Kuwaiti wealthy individuals have become more global in their investments, using vehicles that combine diversification and steady returns with prudent risk management

Ahmed Al-Qutami, Head of the Individual Banking Group at NBK, believes that Kuwaiti citizens are the primary beneficiaries of “mortgage financing” through non-traditional credit instruments. He notes that the state will transfer the burden of housing financing from the Credit Bank to commercial banks, thereby creating a mix of added value that will positively impact citizens, the state, and banks.

Al-Qutami adds: “We do not measure the credit surge by volume, but by its sustainability and banks’ ability to provide long-term financing efficiently. At NBK, we do not want competition to be based solely on interest rates, but on delivering comprehensive value to customers. Therefore, our bank’s approach does not involve chasing individual customers merely to increase market share, but to achieve qualitative and sustainable growth.”

He points out that NBK prepared early for the expected housing credit surge with a competitive package. Although he does not predict NBK’s future market share in mortgage financing, he states: “We aim to enter the list of leading banks in mortgage financing.”

Al-Qutami links the slowdown in individual financing since the beginning of the year to geopolitical developments and rising financing costs. He emphasizes that the core demand for individual credit lies in housing, cars, and consumer needs. He stresses that competition among banks for individual financing must be disciplined, taking into account the cost of funds and risks. He also notes that Kuwaiti wealthy individuals have become more global in their investment decisions, by selecting the best mix of returns, risks, liquidity, and stability.

• What is your view on the claim that banks are the main beneficiaries of the enactment of the mortgage financing law?

- First, it is essential to affirm a key principle: “Mortgage financing” is among the most significant laws that deliver added value to all stakeholders, starting with the citizen, who will be able to obtain their “dream home” at a faster pace and through non-traditional financing options.

Finally, “mortgage financing,” which represents responsible financing, supports the growth of the banking sector and stimulates economic activity, particularly in sectors linked to the housing and real estate development markets.

In practice, banks are expected to play a major role in helping realize the state’s plans to provide sustainable housing care, by transferring the burden of housing financing from the state, represented by the Credit Bank, to commercial banks. This will remove one of the most significant material obstacles to addressing the entrenched housing crisis.

From this perspective, the expected strategic gains from “mortgage financing” cannot be reduced to benefiting one party at the expense of another, as it represents a fundamental pillar in addressing Kuwait’s housing problem. I expect it to become a genuine tool for facilitating homeownership and an effective credit mechanism for managing the housing liquidity crisis. It is important to note here that “mortgage financing” offers genuine credit solutions outside the general treasury, meaning that, accounting-wise, the broader housing objective can be achieved without imposing any financial burdens on the state that would hinder its plans to ensure the sustainability of housing provision.

I believe the new laws have come at the right time, and that banks, together with the relevant government authorities, will contribute to providing suitable credit lines for eligible citizens through competitive products and offerings that serve their interests. We must first focus on the possible and desired benefits of approving “mortgage financing,” and undoubtedly, citizens will be the primary beneficiaries of its enactment.

• With the approval of “mortgage financing,” we are talking about a new banking era with a substantial financing volume. Is bank liquidity sufficient to meet the expected housing boom?

These foundations have enabled the Kuwaiti banking sector to possess a strong capital base and liquidity surpluses, qualifying it to handle any expected growth in demand for housing finance. At Orba, we view any legislative or economic shift as an opportunity to redesign products and services to align with customer needs, while simultaneously maintaining credit standards and asset quality.

More important than the volume of financing is that credit growth be sustainable and well-considered, because the real boom is measured not only by an increase in financing volumes, but also by banks’ ability to finance citizens’ needs efficiently and over the long term. Based on the accumulated experience of Kuwaiti bank executives and the successes achieved by the local banking sector in navigating previous economic cycles despite sharp pressures, optimistic expectations are rising regarding banks’ ability to finance housing demand under the new framework, within defined limits and timeframes, and with high efficiency. This is driven by their financial soundness and high liquidity levels that support this sustainable demand.

- Of course, and here we return to square one, where the citizen is the primary beneficiary of “mortgage financing.” The expansion of the mortgage financing market will contribute to providing new financing models for citizens’ housing through banks. Thanks to the expected competition in attracting customers, banks will offer non-traditional products and financing solutions that will enhance the customer experience. For Orba, we do not want competition to be based solely on interest rates, but on the total value customers receive.

• Amid the expected fierce competition for housing customers and the availability of banking liquidity as mentioned, what will distinguish you in the customer acquisition battle?

- It can be said that Orba prepared early for this strategic phase. Therefore, we have strengthened the bank’s readiness for this phase, which is expected to witness a broad credit expansion, by supporting Orba’s financial and operational flexibility.

During this period, we worked in two directions. The first focused on improving the bank’s financing terms and providing comprehensive banking and consulting services tailored to customer needs. On the other hand, we enhanced liquidity levels within limits that align with Orba’s aspirations, to build sustainable financing value and strengthen the bank’s competitiveness and its ability to continue growing in “mortgage financing.” This was achieved through investing in business and service development, accelerating digital transformation, improving operational efficiency, and developing human capital.

Overall, we will compete in “Warba” with a diverse range of services and integrated credit solutions that ensure service speed, ease of procedures, digital solutions, product flexibility, and quality customer relationships, alongside offering a comprehensive system that provides financing, cards, accounts, investment, and rewards. This goes beyond merely meeting our customers’ current and future aspirations, aiming to exceed them, keeping in mind that reinforcing this approach aligns with Warba’s direction to enhance digital banking services and develop the customer experience.

- From an accounting perspective, it is difficult to make precise forecasts at this time, before the practical implementation of the law begins. However, Warba will undoubtedly be among the first contributors to providing housing financing for citizens. We strive to offer the best services through electronic solutions for customers, facilitating all procedures and excelling in delivering top-tier services to help build “the home of a lifetime,” through a broad and advanced network of partnerships. This facilitates the required financing for customers in collaboration with key companies in the construction sector, thereby providing added value to Warba’s customers.

- The slowdown cannot be attributed to a single factor; there is a combination of factors, including the high cost of financing in recent periods, changes in consumer behavior, and some customers waiting for clarity regarding legislation and financing products. Additionally, rising living costs and prices of certain assets, as well as the geopolitical escalation that erupted in the region since February 28 last year, have imposed negative repercussions on the decisions of investors and consumers, who recorded a noticeable increase in the fear and spending index.

- It may be useful to note here that Warba’s business strategy and its approach in the retail sector are not based on chasing market share merely to increase it, but rather on achieving qualitative and sustainable growth by providing added value to customers. The success of this strategy is reinforced by Warba’s ability, over the past years, to achieve clear growth in its business volume and financial base. For example, the bank’s total assets rose to approximately 6.2 billion dinars during the first half of 2026, and financing receivables reached about 4.3 billion dinars. The bank also strengthened its capital base through capital increases and the issuance of first-tranche sukuk, which supports its capacity for future expansion. We aim to continue growth in the retail, corporate, and investment sectors, while maintaining asset quality and capital efficiency.

- We do not view customers solely as citizens or residents, but rather according to clear credit criteria that include repayment capacity, income stability, existing obligations, employer, and credit history. Thus, our credit policy is based on balancing customer support with maintaining the quality of the credit portfolio, which is essential for any bank seeking sustainable growth.

• Notably, as banks compete fiercely to attract customers for credit, they simultaneously open a parallel track to attract deposits with interest rates that sometimes approach loan rates. Does this mean operating without profit margins?

- Competition for customers has become very intense. Banks view customers not only through financing but through the entire banking relationship. When a bank attracts a financing customer, it does not look solely at the profit margin from financing, but at the potential to build a long-term relationship that includes accounts, cards, deposits, investment, and other services.

The rise in deposit rates is primarily linked to the interest rate cycle, the cost of funds, and competition for liquidity. When the cost of funds increases, banks compete more intensely for deposits, particularly stable and long-term ones. Moreover, customers have become more aware of the opportunities available to them, making competition for savings more pronounced.

Importantly, Kuwaiti wealthy individuals have become more global in their investment decision-making. They no longer focus on a single market but prefer investment vehicles that combine returns with prudence, risk management, liquid cash flow, and stability.

In an era of technological transformation and accelerating digital solutions, we believe the future of banking is digital. Therefore, we do not rule out adopting any model that can better serve customers and meet their aspirations. However, for us, the priority is not merely creating a digital branch in the traditional sense, but building an integrated digital banking experience that is competitive.

We already have digital segments and products targeting different customer groups, including the “Wave Banking” segment for youth. We continue to develop it to align with the behavior and expectations of the new generation. Ultimately, our focus is on ensuring customers can easily access all “Warba” services while guaranteeing sustained improvements in speed, reduced costs, and alignment with the latest banking service models.

• All Kuwaiti banks speak of digitalization as an endless race to improve operational efficiency and exceed customer expectations. What is your stance in this regard?

Today, bank customers compare their banking experience not only with other banks but also with all the digital applications and platforms they use in their daily lives. Therefore, success is now measured by the ease and speed of the experience, along with enhanced customer loyalty.

Consistent with this mandatory path, we at “Warba” believe that keeping pace with digitalization through the latest solutions is not a banking luxury but a necessity without which operations cannot function. Thus, we do not focus solely on automating processes and reducing steps and procedures. Instead, we aim to develop the concept of digitalization through key transformation strategies, innovating digital applications and channels, and leveraging data and artificial intelligence more extensively to understand customer needs and deliver more personalized services. This also strengthens the bank’s ability to identify the drivers and risks of transformation through deep banking expertise.

Yes, this is natural. Banks differ in terms of capital size, asset quality, liquidity surpluses, technological infrastructure, customer base, and risk management capabilities. Therefore, the future will be broader and more market-capacious for banks with strong capital bases, which serve as a strong driver for operational growth, supported by innovative and secure solutions.

Drawing on this strength, “Warba” works to harness financial power, operational flexibility, technology, and prudent risk management. This helps the bank confidently enhance the growth of its funding base. At the same time, we believe that growth must be calculated and sustainable, not merely an artificial expansion of figures that does not reflect prudent risk management, which could result from an excessive appetite for lending.