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Kuwait: Al-Sager: Kuwait on the Right Track to Drive Economic Growth
27.10.2024Mr. Isam Al-Sager, Group Vice-Chairman and CEO of National Bank of Kuwait (NBK) stated that the Group’s net profit growth remains mainly driven by core banking business.
In his interview with Al Arabiya TV, on the sidelines of the Annual Meetings of the International Monetary Fund (IMF) and the World Bank Group (WBG) in Washington, D.C. joined by NBK, Al-Sager mentioned: “NBK posted strong net interest income growth for 9M2024 on the back of growth in volumes, relatively higher interest rates, and operating efficiently to control operating costs and cost of risk.”
“Our net interest income for the nine-months period reached KD 733.7 million, boosting by 10.2% over 2023, whereas net operating income reached KD 931.0 million, growing by 7.8% year-on-year.”
“The cost of risk was 34bps during 9M2024, mainly resulting from lower credit loss and impairment provisions, while remaining committed to our conservative approach in managing credit exposures,” he noted.
“As regards asset quality, NPL ratio generally improved to reach 1.39% of total credit portfolio as at end of December 2024, whereas loan loss coverage ratio increased to 263%,” he added.
Lower interest rates
On the impact of the rate cut cycle on banks' net margins during 4Q2024 and next year, Al Sager said, “It is true that margins come under pressure with low interest rates, but we must keep in mind that the increased volume of business activities resulting from the low interest rate environment may offset these pressures, as the declining rates will encourage lending, especially by large corporates.”
“NBK is hedging against interest rate movements through its diversified business model and increased focus on fee business, and we expect net margins for 2024 to be largely stable, probably a few basis points higher than last year's levels,” he explained.
“As for 2025, the frequency and size of rate cuts globally remains uncertain, and its impact will be felt more clearly in the coming quarters,” he added.
On a question about the possibility of a change in demand for lending due to the declining lending cost, Al-Sager replied: “For corporate lending, lower interest rates are expected to support credit growth, but this is also conditional on a favorable macroeconomic and business environment and accelerated project awards, which combined will provide a greater momentum for private sector lending. On the retail side, we expect to see a gradual increase in demand for retail loans with each rate cut.”
Saudi Market
On NBK’s operations in Saudi Arabia, Al-Sager emphasized that Saudi Arabia as a key and strategic market for the Group’s international operations where we offer our services to diverse clientele that includes GREs, large corporations, and family-owned businesses.
“The Group seeks to increase its presence in the wealth management business through NBK Wealth, in addition to expanding its offerings to customers through funds and other wealth management services.
As regards NBK's targets and growth expectations in Saudi Arabia, Al-Sager said that they will be in line with the bank's conservative approach, noting that NBK has been present in the Saudi market for a long time and serves large corporations and GREs, which align with the Group’s conservative approach and risk management practices.”
“We operate currently in KSA through 3 branches, in Riyadh, Jeddah and Eastern Province and target further expansion in the Saudi market.”
On a question about whether NBK- KSA intends to expand in the Saudi market through acquisitions, Al-Sager said, “Whenever we have a suitable acquisition opportunity, we will consider it seriously. We are not looking for acquisitions for the sake of acquisitions, but we seek opportunities that maximize returns for our shareholders.”
Egyptian Market
As for the Egyptian market, Al-Sager said that it is currently stable, which proves NBK's optimism about the market's huge potential and promising opportunities.
“The Egyptian economy has recently benefited from the reforms aiming to attract more foreign inflows and the government's closing of several foreign investment deals, which restored confidence in the economy and the Egyptian currency,” he explained.
Regarding NBK-Egypt, Al-Sager stated, “We maintain a very healthy loan portfolio in terms of asset quality, while the cost of risk at the end of 1H2024 in Egypt was below 1% (0.56% exactly), and NPL to total loans ratio stood at 1%. So, at this stage, we are not concerned about the credit quality of our loan portfolio in Egypt.”
“Our operating performance in Egypt remains among the most profitable locations for the Group with promising returns, while NBK-Egypt seeks opportunities to grow its contribution to the Group, which stands at around 5% of total assets and profits,” he highlighted.
Boubyan and Gulf Bank Merger Negotiations
On the merger negotiations between Boubyan Bank and Gulf Bank, Al-Sager said, “As the majority shareholder in Boubyan Bank, we are supportive of the discussions. But our support is not unconditional, like all our previous transactions historically, we should find shareholder value creation in this transaction.”
“So far, the potential transaction makes sense from a strategic point of view as it is in line with NBK Group's diversification agenda and strengthens its position in the local market by expansion in Islamic banking through Boubyan Bank.”
“There are steps that have started recently such as the due diligence process, and there is a long list of regulatory and market requirements, and once these are completed, we will be able to reach a final assessment of the feasibility of the transaction,” he continued.
Project Awards
Al-Sager said he is optimistic about the business environment and the project award market in Kuwait, especially in light of the strong activity witnessed by the project market during the third quarter of this year compared to the recent past years, expecting this momentum to continue in the remainder of 2024 as well as into 2025.
He pointed out that the suspension of parliament had so far led to a simplification of the decision-making process, as the decision is now solely in the hands of the government. Therefore, we no longer have that entanglement of decision-making, which will reflect positively on the long-awaited economic reforms.
“Several projects were delayed for years and now we can say we are getting out of the bottleneck and Kuwait is on the right track to drive economic growth with a government-backed consensus to prioritize major development projects, and promote Kuwait as an attractive investment hub by passing a set of long-awaited key laws to support economic reforms. We remain optimistic to witness serious steps towards promoting the private sector’s role in propelling development,” he said.
“We think that our optimistic look about starting economic reforms and improving business environment in Kuwait in the coming period will be supported by actual steps on the ground,” he stressed.
Fiscal Reforms
On whether the fiscal reforms likely to be undertaken by the government, especially those related to current spending, will impact consumer spending and credit in Kuwait, Al-Sager said: “We need to look at the bigger picture as Kuwait needs reforms to support the transition to a dynamic and diversified economy, and to achieve that goal, there is a need for significant reforms to address fiscal imbalances on the public spending side.”
“Kuwait has been experiencing modest growth of the non-oil economy since the pandemic, which requires changes in the composition of public spending with an increased focus on capital investments, to bridge the performance gap with neighboring economies,” he explained.
Al-Sager expected that the impact, if any, of implementing current spending reforms on consumer credit would be temporary, and that the momentum would be quickly restored, as the consumer credit sector in Kuwait is strong, resilient, and highly dynamic.
Kuwait: NBK Posts Strong Net Profits of KD 575.6 Million in FY2025
28.01.2026National Bank of Kuwait (NBK) has announced its financial results for the financial year ended 31 December 2025.The Bank reported a net profit of KD 575.6 million (USD 1.9 billion), compared to KD 600.1 million (USD 2.0 billion) for the financial year 2024. Earnings per share (EPS) stood at 64 fils for 2025, compared to 66 fils for 2024.
Profit before tax increased by 5.4% on a year-on-year basis, reaching KD 734.6 million (USD 2.4 billion) at the end of 2025, compared to KD 696.8 million (USD 2.3 billion) in 2024.
Total assets as of December 2025 grew by 13.1% year-on-year, reaching KD 45.6 billion (USD 149.4 billion), while customer deposits grew by 14.0%, totaling KD 26.1 billion (USD 85.3 billion) by the end of 2025.
Meanwhile, Group loans and advances reached KD26.8 billion (USD 87.8 billion) by December 2025, reflecting a growth of 13.1% year-on-year. In the meantime, shareholders' equity also saw an increase, standing at KD 4.3 billion (USD 14.0 billion), up by 9.2% year-on-year.
In terms of distributions, the Board of Directors has proposed a cash dividend of 35 fils per share for the financial year 2025, equivalent to 53% of net profits. In addition, the Board has recommended the distribution of bonus shares at a ratio of 5%. These proposed distributions are subject to the approval of the Annual General Assembly (AGM).
A Prudent Approach
Commenting on the Bank's annual financial results, Mr. Hamad Al-Bahar, NBK Group Chairman, affirmed that, despite the challenges posed by the global economic environment in 2025, including the repercussions of geopolitical tensions, tariff pressures, and the accommodative trajectory of interest rates, the Bank succeeded in further consolidating its position as a leading financial institution. This performance was underpinned by a prudent operating approach and a flexible strategy anchored in diversification and financial discipline.
Al-Bahar noted that the Bank’s financial results for the year ended 31 December 2025 reflect NBK’s ability to adapt and navigate a wide range of economic conditions, supported by a diversified business model, a strong capital base, high-quality assets, comfortable liquidity position, and a robust governance and risk management framework.
He added that the Bank continues to successfully execute its strategy of balancing the delivery of superior returns to shareholders with meeting the evolving needs of its customers. He further emphasized that sustainability has become a central pillar of NBK’s long-term growth agenda. The Bank recorded a significant year-on-year increase of approximately 23% in the value of its sustainable assets, reaching USD 6.10 billion by the end of 2025. This represents 61% of its strategic 2030 target of USD 10 billion. Al-Bahar added that 2025 marked a year of significant achievements that further reinforced NBK’s position as the largest contributor to corporate social responsibility initiatives in Kuwait. Among the most notable milestones were the inauguration of the Shuwaikh Beach Development and Beautification Project, funded by the Bank at a cost of KWD 3 million, as well as the laying of the foundation stone for the expansion of the NBK Children’s Hospital for Hematology, Oncology, and Stem Cell Transplant. The expansion includes the construction of a new building at an estimated cost of nearly KWD 19 million.
Solid Operating Performance
Meanwhile, Mr. Isam J. Al-Sager, NBK Group Vice Chairman and CEO, said: “The Group’s 2025 results reflect the solid operating performance delivered across its various business segments, led by its core banking activities, despite the volatile global operating environment and its spillover effects on regional and local markets. During the year, the Group recorded a year-on-year growth of 3.6% in net operating income, reaching KWD 1.3 billion (USD 4.2 billion).”
He noted that the Group’s profit before tax recorded a year-on-year increase of 5.4% in 2025, while net profits were impacted by the application of the domestic top-up minimum tax on multinational entities operating in Kuwait. He emphasized that this impact on profit growth is transitional in nature, reflecting the base-year effect of 2025 as the first year of the tax’s implementation.
Al-Sager emphasized that NBK Group’s diversified business mix, carefully calibrated strategic investments, and disciplined risk management have mitigated the impact of adverse global economic conditions. He added that NBK continues to invest in technology and innovation as fundamental pillars of inclusive and sustainable growth, while also expanding its customer base and capitalizing on opportunities across promising markets and key sectors.
He further noted that, throughout 2025, the Bank continued to roll out innovative banking services and products specifically designed to meet the evolving needs of its customers. In addition, the Group’s Consumer and Digital Banking arm launched its new five-year strategy through 2030, marking a strategic shift from mere digitization of services to a fully customer-centric, underpinned by data collection and advanced analytics. This transformation further reinforces NBK’s leadership position locally and regionally, offering an exceptional banking experience.
Furthermore, Al-Sager pointed to the key contribution of both NBK Group’s corporate banking and international operations, as well as Boubyan Bank— the Group’s Islamic banking arm— in strengthening the Group’s profits. He further highlighted that NBK Wealth has continued to consolidate its position as the largest wealth management entity in Kuwait and among the largest in the region, by offering an integrated suite of private banking, investment management, and advisory services through a globally connected network of operations.
On major financing transactions, Al-Sager stated: “During 2025, NBK led a KWD 1.5 billion syndicated term facility with Kuwait Petroleum Corporation (KPC). This transaction represents the largest financing of its kind denominated in Kuwaiti Dinars. The Bank served as the mandated lead arranger and bookrunner for the facility, as well as the agent for the conventional tranche. NBK’s share amounted to KD 495 million of the total financing, making it the largest contributor among all participating conventional and Islamic banks, accounting for approximately 60% of the KD 825 million conventional tranche.”
Al-Sager noted that this transaction reinforces NBK’s position as the largest financier of Kuwait’s oil sector and the primary banking partner for energy companies in supporting their expansion and growth plans.
He further noted that Kuwait Clearing Company’s selection of NBK as the country’s main settlement bank represents a testament to the Bank’s substantial investments in digital infrastructure and its high level of operational readiness. This milestone further strengthens NBK’s role in advancing the development of Kuwait’s capital market infrastructure.
On the sustainability front, Al-Sager affirmed that NBK continues to deepen its leading role in shaping a more sustainable future through its green financing initiatives and the development of products and solutions that reflect global best practices in sustainable finance. In this context, he pointed to the Bank’s signing in 2025 of Kuwait’s first-ever green loan agreement. He also highlighted NBK’s ongoing efforts to strengthen its environmental, social, and governance (ESG) framework through measurable initiatives that support emissions reduction and the achievement of carbon neutrality by 2060.
The Operating Environment
Al-Sager expressed his optimism regarding an improvement in the domestic operating environment in 2026, supported by a number of key factors.
He explained that the Financing and Liquidity Law enacted in 2025 has established an advanced framework for long-term sovereign debt issuances, thereby enhancing banking system liquidity through high-quality sovereign assets and supporting the financing of large-scale projects. He added that the Real Estate Financing Law—once approved—would enable banks to provide long-term financing for the residential sector, helping address the housing challenge and stimulating activity across construction and real estate–related sectors.
Moreover, Al-Sager noted that the value of government-awarded projects in 2025 exceeded KWD 4 billion, surpassing 2024 levels by well over 60%. Meanwhile, bank credit recorded solid performance, with credit to residents growing by approximately 7.63% year-on-year as of the end of December 2025, the fastest pace since 2023.
He indicated that project awards are expected to gain further momentum in 2026, supported by the broad pipeline of initiatives under the government’s capital projects program across multiple sectors, alongside a gradual pace of interest rate cuts. This combination bodes well for the outlook and is set to create a favorable environment for credit growth for both corporates and individuals during the year.
He emphasized, however, that while the domestic outlook remains positive, it is accompanied by certain regional and global challenges, including persistent geopolitical tensions, tariffs, and their associated negative economic repercussions.
Prestigious Awards
During 2025, NBK further consolidated its leadership position by receiving a series of prestigious awards from leading global institutions and publications.
Among these accolades, MEED named NBK Best Retail Bank and Best SME Bank in Kuwait, in addition to awarding the Bank several regional honors across the Middle East and North Africa, including Best Loan Offering, Best Contactless Payment Experience, and Best Payment Solutions for SMEs. NBK’s digital subsidiary, Weyay Bank, was also recognized with the Most Innovative Product Award for its children’s card, “Jeel.”
NBK also received three prestigious awards from Global Finance, including Best Digital Payment Solutions and Best Online Product Offerings in Kuwait, while Weyay Bank was named Best Digital Bank in Kuwait. Furthermore, the Bank won four awards from Euromoney, including Kuwait’s Best Bank for ESG, Kuwait’s Best Bank for Large Corporates, Kuwait’s Best Bank for Diversity and Inclusion, as well as Kuwait’s Best Digital Bank for Weyay Bank.
Key financial indicators for the financial year ended December 31, 2025
• Net operating income stood at KD 1.3 billion (USD 4.2 billion), up 3.6% year-on-year
• Total assets grew by 13.1% year-on-year, at KD 45.6 billion (USD 149.4 billion)
• Total loans and advances increased by 13.1% year-on-year to KD 26.8 billion (USD 87.8 billion)
• Customer deposits grew by 14.0% year-on-year to KD 26.1 billion (USD 85.3 billion)
• Total shareholders’ equity amounted to KD4.3 billion (USD 14.0 billion), registering an annual growth of 9.2%.
• Strong asset quality metrics, with NPL/gross loans ratio at 1.36% and an NPL coverage ratio of 240%
• Robust Capital Adequacy Ratio of 17.0%, comfortably exceeding regulatory requirements.