Kuwait

Kuwait's banking system comprises ten Kuwaiti banks (five conventional, four Islamic and the specialised Industrial Bank of Kuwait) and 11 branches of foreign banks registered with the Central Bank of Kuwait (CBK). Local banks' domestic balance sheet stood at KD104.3bn in July 2026, while the largest groups also have sizeable overseas operations. Concentration is high: National Bank of Kuwait (NBK), which consolidates its majority-owned Islamic subsidiary Boubyan Bank, and Kuwait Finance House (KFH) reported consolidated assets of KD45.6bn and KD42.8bn at end-2025, against KD9.1bn for the next-largest group, Burgan Bank.

Islamic banks form a large segment, led by KFH, which has an international network of more than 600 branches. On the domestic balance sheet, private-sector deposits of KD41.1bn funded 39% of liabilities in July 2026; foreign liabilities (KD17.2bn), own funds (KD17.9bn) and public-institution deposits (KD9.5bn) made up much of the remainder, while government deposits rose to KD5.8bn from KD3.7bn at end-2025. Utilised cash credit reached KD64.9bn in June 2026, of which real estate accounted for KD11.4bn.

Asset quality and capital are strong at the largest banks. NBK reported a non-performing loan ratio of 1.36% and a capital adequacy ratio of 17.0% at end-2025, and KFH a capital adequacy ratio of 19.81%, both above regulatory requirements. NBK's net profit fell to KD575.6m in 2025 from KD600.1m even though profit before tax rose 5.4%; NBK said net profit was affected by the new domestic top-up minimum tax on multinational entities.

The main risks in 2026 stem from the regional conflict: the CBK cited current geopolitical developments when it eased liquidity rules in March. Utilised credit grew 1.9% in the first half of 2026. Kuwait's addition to the FATF list of jurisdictions under increased monitoring in February 2026 adds to compliance demands on banks and their correspondents.