A financial pioneer with a global presence and outstanding reputation, Kuwait Finance House has created a brand distinguished by credibility and trust. The firm is the largest listed company on the Boursa Kuwait — with a market capitalisation in excess of KD12bn ($39bn) — and stands out as the most profitable of the nation’s banks.
The group’s impressive profits and solid financial position are in part down to its reach, which spans 640 branches across 12 countries, including Bahrain, Turkey, Saudi Arabia, Egypt, Germany and the UK.
In 2023, the net profit attributable to shareholders reached KD584.5m ($1.9bn) — an increase of over 63% on the previous year and the highest across the entire Kuwaiti banking sector. For the first half of 2024, the group’s profits reached KD 341.2m ($1.1bn) — an increase of 2.3% compared with the same period in 2023.
Acting group CEO Abdulwahab Al-Rushood says KFH’s strong performance across the various markets in which it operates provides a solid foundation for sustainable growth. “KFH’s entities, particularly in Kuwait, Bahrain and Turkey, played a crucial role in boosting operating profit,” he says.
The group’s leadership in Islamic finance is another factor driving success. “KFH’s expertise in Sharia-compliant banking has allowed it to capture significant market share over the years, tailoring Islamic financing products to continue attracting new customers in new markets,” says Al-Rushood.
KFH has also ensured exemplary performance by managing the challenges of interest rate hikes, inflation and market volatility. A comprehensive approach to active oversight — centred on asset and liability management, hedging, capital adequacy and stress testing — has allowed the firm to weather all market conditions.
In recognition of KFH’s financial strength, market value and respected brand, the firm has received numerous prestigious global awards and maintained a top credit rating from global agencies. Forbes ranked KFH ranked first in Kuwait and 10th in the whole Middle East region for market capitalisation and profitability in its Top 100 Listed Companies in 2024.
Digital trailblazer
KFH’s strategic priorities include making sure its core banking business maintains sustainable profitability, expanding its growing customer base and promoting a solid innovation and digital transformation strategy. The bank prides itself on maintaining excellence across its various digital services and platforms.
“KFH is a leader in offering innovative services and financial solutions,” says Al-Rushood. “We are leveraging cutting edge technologies like robotics and artificial intelligence to streamline back office operations, and utilising big data analytics to make informed business decisions.”
These advancements showcase KFH’s commitment to harnessing frontier and emerging technologies for comprehensive digital transformation. The group has multiple initiatives to create new and improved digital channels.
This includes the creation of Tam Digital Bank, which KFH launched in October 2023 as the first Sharia-compliant digital bank in Kuwait.
Amid the surge of Islamic financial transactions across different markets, Al-Rushood anticipates a further globalisation of Sharia-compliant financial products. “This is a significant challenge that requires maintaining key influencing factors such as operational efficiency, cost management, innovation, technology and cybersecurity, as well as social responsibility,” he says.
Environmental awareness
Sustainability and environmental, social and governance considerations have become increasingly central to banks’ operations and leadership strategies.
Al-Rushood notes KFH has embedded ESG factors into its core strategies and decision-making processes. This includes developing ESG policies and frameworks to guide the firm’s operations and investments. KFH is also including ESG factors in its risk management frameworks, particularly related to climate risk and social responsibility.
“Banks are recognising the importance of sustainability and ESG, as both a responsibility and an opportunity to drive long term value and align with stakeholder expectations,” Al-Rushood says. “KFH operates under Sharia principles, which are aligned with goals to develop more sustainable banking practices.”
The group has participated in several United Nations Development Programme initiatives that have helped it align its strategy and investments across business lines with the UN Sustainable Development Goals. “We are financing initiatives that take carbon emissions mitigation into consideration,” says Al-Rushood, “increasingly linking our investment plans with SDGs, and promoting initiatives to build awareness around environmental products, such as green sukuk.”
KEY COMPANY DATA
First half of 2024
Total assets: $118.8bn
Net profit: $1.2bn
Capital adequacy ratio: 17.15%
Financing to deposit ratio: 97.25%