The banking landscape in Kuwait consists of 11 locally incorporated banks (of which five operate under the principles of Sharia) and 12 branches (of which one operates under the principles of Sharia) of foreign banks.
Total listed banking sector assets at the end of 2018 stood at $264.5 billion which was 5% higher than that at the end of 2017. The market continues to be dominated by NBK and KFH who, together, have a 56.4% share of the total assets.
Total assets of Islamic banks stood at $100.3 billion at the end of 2018 which was 6.3% higher than that at the end of 2017.
Profits for Kuwaiti banks increased an impressive 19.3% compared to 2017. This growth was mainly due to higher net interest income which increased by 11% in local currency terms. This growth was offset by the provisions booked by Kuwaiti banks in 2018.
At the end of 2018, the average Non-performing-loans (NPL) ratio for Kuwaiti banks stood at less than 2%, which is one of the lowest amongst GCC banks.
2018 saw Kuwaiti banks continue to access international debt and capital markets. Three banks accessed the debt and capital markets raising approximately $1billion. Earnings may get a boost based on the increase in limit for consumer loans by the CBK in late 2018.
In 2018, one of the largest Islamic banking groups, Kuwait Finance House (KFH), announced its intention to acquire Bahrain-based Ahli United Bank (AUB). The acquisition, which completed in February 2019, will be the first cross-border banking transaction in the GCC and will create the largest banking group in Kuwait and the sixth largest banking group in the GCC.
Kuwaiti banks will continue to invest in digital banking channels, infrastructure and solutions in 2019. This will involve investments in new age technologies such as intelligent automation, blockchain and AI.
Regulatory sandbox framework issued by the CBK — The framework targets both companies and individuals striving to provide innovative fintech products or services that are based on, or relevant to the electronic payment of funds either by using a new technology or an existing technology in an innovative way.
The main objective of the framework is to promote innovation by temporarily exempting participants of certain requirements pertaining to either the implementation of the regulatory instructions or the required licenses.
Appointment of Chief Data Officer and Chief Digital Officer — A large banking group in Kuwait has appointed a Chief Data Officer and a Chief Digital Officer to drive the bank’s digitization program. In addition, the banking group has developed a digital roadmap which includes defined KPIs, which are directly linked to profitability and which will allow for accurate tracking of progress.
Biometric card — A large banking group in Kuwait is the first in the GCC to introduce a biometric credit card with an embedded fingerprint sensor through Mastercard.
The biometric card requires the cardholder to place their finger on the embedded sensor while making a point of sale transaction. The fingerprint is verified against the template stored on the card and, if the biometrics match, the transaction
Source AME Info