Kuwait Banks Association: Banking sector enjoys strong financial positions and high liquidity - Sarmad

(KUNA) – The chairman of the board of directors of the Kuwait Banks Association, Hamad Al-Marzouq, affirmed today, Friday, 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 ability to confront various economic and financial challenges while continuing its pivotal role in financing economic activities and supporting development and financial stability in the State of Kuwait.

In a press statement, Al-Marzouq said 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 totality 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 regulatory system supervised by the Central Bank of Kuwait, which is based on applying 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 the financial positions of Kuwaiti banks is evident in their liquidity and capital adequacy levels, which exceed regulatory requirements with comfortable margins, a fact previously confirmed by the Central Bank of Kuwait when announcing the stimulus and precautionary measures it took in March 2026.

He noted 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 maintaining the continuity of financing flows to the national economy. He affirmed that temporary adjustments to certain regulatory requirements do not, in themselves, indicate weakness in the banks’ financial positions, but rather reflect the flexibility of prudential tools and their capacity 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, their capital adequacy, the stability of their funding sources, the efficiency of liquidity and risk management, and their sustainable ability to meet obligations and continue providing the necessary services and financing to 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 added that any future adjustments to prudential requirements are made within the framework of established regulatory policies, taking into account the preservation of financial stability and the sustainability of banking activities.

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

The chairman of the Kuwait Banks Association also affirmed that the Kuwaiti banking sector possesses strong financial and regulatory foundations, and that its advanced levels in capital adequacy, liquidity, and risk management reflect the success of the prudent regulatory approach adopted by the Central Bank of Kuwait, which enhances banks’ ability to cope with economic changes and maintain their financial stability.

He noted that Kuwaiti banks will continue to play their pivotal role in supporting

The national economy and the financing of development projects and economic activities are underpinned by robust financial centers, prudent risk management, and a well-established regulatory framework, thereby enhancing Kuwait’s position as a financial and banking hub characterized by a high degree of reliability and stability.