Kuwait's Banking and Lending Landscape in Q1 2025: Insights and Highlights
Banking Sector Vitality
- Equity Boost: Major banking players, like Burgan Bank and the Commercial Bank of Kuwait, have experienced robust increase in share prices, signaling a promising beginning for the sector.[1]
- Financial Health: Kuwait's banks have demonstrated impressive progress in terms of total assets and net income, maintaining this upward trend into 2025.[2]
Loan and Deposit Developments
- Deposit Growth: In addition to loan growth, NBK observed a year-on-year surge of 5.6% in customer deposits and a substantial 15.9% rise in certificate of deposit holdings during Q1 2025. NBK's strong core deposit foundation remains a key asset.[4]
- Industry-wide Enlargement: Loan growth was noted in both conventional and Islamic banking sectors, both domestically and internationally.[4]
Kuwait's bank deposits surged by 1.3 billion in Q1 2025, fueled by expansion in the private sector.
Loan Expansion: The National Bank of Kuwait (NBK) reported a vigorous 3.8% increase in loan issuance, primarily due to expansion in both retail and international segments.[4]
Technological Developments and Strategic Opportunities
- AI Adoption: There is a growing focus on implementing AI technology within banking operations to aid cost reductions and foster strategic growth.[2]
- Capital Deployment: Kuwait's banks hold a substantial amount of excess capital that can be judiciously invested into lucrative risk-adjusted assets, capitalizing on favorable economic conditions.[5]
Initial findings from the Central Bank of Kuwait for Q1 2025 reveal the following trends:
- Overall deposits in Kuwaiti banks rose by 2.4%, representing 1.306 billion dinars, totaling 55.129 billion dinars.
- The private sector had a 2.5% increase in Kuwaiti dinar deposits, totaling 42.528 billion dinars. Private foreign currency deposits saw a 2.67% increase as well.
- Government deposits, on the other hand, decreased by 2.6%. Increases were observed in public financial and non-financial institutions deposits, however, rising 5.45%.
- During the first three months of 2025, total loans granted reached approximately 815.5 million dinars, raising the credit balance to 57.991 billion dinars.
- Significant growth was witnessed in private sector housing loans, securities loans, real estate loans, construction loans, and industrial loans.
- Loan growth for purchasing securities rose by 0.6%, oil and gas sector loans decreased by 1.1%, real estate loans increased by 2.4%, and construction loans increased by 0.6%. Industrial loans rose by 2.1%, and loans to banks declined by 6.55%.
- Monthly loan disbursements saw a 8.9% growth, rising from February's 2.93 billion dinars to 3.195 billion dinars.
[1] Source: Al Rai Daily
[2] Source: Kuwait Times
[4] Source: National Bank of Kuwait (NBK) Quarterly Report Q1 2025
- The increase in total loans granted during Q1 2025, totaling approximately 815.5 million dinars, was a significant growth within Kuwait's banking sector.
- The National Bank of Kuwait (NBK) observed a year-on-year surge of 5.6% in customer deposits and a substantial 15.9% rise in certificate of deposit holdings during Q1 2025, demonstrating strong growth in deposit holdings.
- In alignment with industry-wide trends, loan growth was seen in both the conventional and Islamic banking sectors in Kuwait during Q1 2025.
