Kuwait Finance House: Qualitative Growth Through Disciplined Risk Approach

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 Abdul Karim Al-Samdan, Group Chief Financial Officer, and Fahd Al-Makhzoum, Acting Head of International Banking and Head of Strategy.

On his part, Al-Samdan stated that the financial performance of the KFH Group 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 lower expenses.

Operating net income rose by 11.7% year-on-year to 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, and the financing portfolio grew by 7.5% compared to the end of the previous year, reflecting the continued deployment of liquidity to finance customers.

Al-Samdan added that the group benefits from the geographic diversification of its operations. International operations accounted for approximately 38.6% of the group’s financing and 49.6% of its deposits as of the end of September.

Al-Samdan said, “The gap between revenue and expense growth is positive compared to the same nine-month period last year. Operating revenues rose by 6.7%, while expenses declined by 3% to KD 447.5 million. As a result, the cost-to-income ratio improved by 3.1 percentage points to reach 30.8%.”

He also clarified that the regulatory provision balance remains higher than the expected credit losses under International Financial Reporting Standard 9. Against expected credit losses of KD 549.8 million, the provision balance according to Central Bank of Kuwait regulations stood at KD 1,049.7 million, resulting in a provision margin of KD 499.9 million.

Regarding liquidity indicators, Al-Samdan noted that they remained comfortably above current regulatory minimums in September. The liquidity coverage ratio reached 137%, and the net stable funding ratio stood at 120.7%, both exceeding the minimum requirement of 80%. The financing-to-deposit ratio in Kuwait was 84.3%, below the maximum limit of 100%.

The Common Equity Tier 1 (CET1) ratio stood at 13.2%, the Tier 1 capital ratio at 15.4%, and the total capital adequacy ratio at 17.2%. The corresponding current requirements were 10.5%, 12%, and 14%, respectively.

For his part, Al-Makhzoum highlighted operational performance, key developments in performance, and strategic achievements in the third quarter of 2026. He said, “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 reflect the robustness of KFH’s business model and the diversification of its activities, alongside the continued efficient execution of its strategy. Our priorities include focusing on the customer, enhancing integration among group companies, accelerating the pace of digital transformation, and achieving qualitative growth, while adhering to a disciplined approach in risk and liquidity management.”

He expressed confidence in KFH’s ability to continue delivering sustainable value to shareholders, meeting its customers’ expectations, and contributing to the long-term development trajectory of Kuwait.

Al-Muxaim added: “Kuwait Finance House (KFH) continued to develop its digital capabilities through the implementation of KFHOnline, smart branches, and enhanced ATMs, alongside updating the eCorp platform to strengthen corporate banking services. With the opening of the Qairawan Center, the Group’s service centers in Kuwait increased to three, contributing to enhanced customer service across our regional business network.

In Bahrain, KFH achieved tangible progress in digital transformation, recording a 40% annual increase in the number of active customers through digital channels, and successfully automating over 150 banking services, bringing the total number of digital banking services to more than 300.

These initiatives contribute to strengthening integration among Group companies, enhancing the customer experience, and improving operational efficiency. In recognition of these achievements, The Banker magazine ranked KFH as the best-performing bank in Kuwait in its list of the Top 100 Arab Banks for 2026.

According to the bank’s statement, 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 as the best-performing bank in Kuwait in The Banker’s Top 100 Arab Banks list for 2026, receiving Euromoney awards for Wealth Management and ESG Governance, being named the best Islamic bank in the world by Global Finance, and winning the award for best digital bank in Kuwait from MEED.

In this context, the International Monetary Fund (IMF) expects Kuwait’s GDP to contract in 2026, followed by a strong recovery in 2027 with projected GDP growth of 17.1%, as energy production and transportation are expected 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.

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

KFH clarified that the recently issued Government Sukuk Law will help establish a framework for diversifying sovereign funding sources, expanding the investor base, and providing Sharia-compliant investment instruments.

As for the new housing finance law, it 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 these laws are implemented, they will offer promising opportunities for KFH.

He added that while the global economy has maintained its resilience, the IMF raised its 2026 global GDP growth forecast to 3.1% in October, while keeping its 2027 forecast at 3.4%, supported by AI-related investments.