Best bank: Kuwait Finance House
Kuwait Finance House (KFH) is Euromoney’s best bank in the country this year, following a record-setting financial performance and the consolidation of Ahli United Bank Kuwait.
The bank made progress across sustainability, digital transformation, wholesale banking, treasury and social responsibility, in addition to its overall financial performance. KFH generated KD585 million ($1.9 billion) of annual net profit for the year – up 63% on the previous year and a record high for the sector.
Furthermore, 2023 was a banner year for the bank following the completion of the merger with Ahli United Bank Kuwait in February.
This is the first time KFH has taken the top spot – by assets, market capitalization and profitability – in the rankings for Kuwait.
KFH reported net operating income of KD945 million – up 31% on the year before – with a return on average tangible equity of 20.51% (up from 16.48% in 2022), return on average assets of 1.82% and a slender cost-to-income ratio of about 35%. Core equity tier-1 capital remains strong at 13.94%, a marginal increase on 2022 levels.
Contributing to this financial performance were growth in sustainable investment activity – KFH increased its investment in environmental, social and governance-labelled sukuk by 362% to $294 million-equivalent last year – and digital banking, where KFH launched Tam, the first shariah-compliant digital bank in Kuwait.
In addition, the bank’s treasury business executed $38 billion of foreign-exchange transactions and $13 billion of sukuk during the year, making KFH one of the leading banks in this ever-expanding global market.
Best investment bank: National Investments Company
National Investments Company (NIC) wins the award for best investment bank in Kuwait following a series of notable capital raisings and advisory mandates across the year.
The firm, one of the smaller, more specialist investment banks in the country, has been growing in recent years, and last year executed transactions across equity capital markets and M&A in different sectors.
These deals were not the biggest nor the most complex, but they highlight the expertise of NIC’s investment banking team, which to some extent punches above its weight.
One of the key ECM deals that the bank worked on last year was the $55 million preferred share offering for Kuwaiti oil services and energy group Action Energy Company, for which NIC was the lead manager, subscription agent and financial adviser.
The deal – supported entirely by the Gulf Investment Corporation, an investment group owned by the six member countries of the Gulf Cooperation Council – marks the first time such a transaction has been issued in Kuwait’s capital markets, broadening the capital instruments that can be used by corporates in the country.
NIC was also active on the M&A side, in particular advising the English Education Providers Group (EPG) on divesting its 100% ownership in a portfolio of over 30 nurseries and four schools to Boubyan Petrochemical Company, a Kuwaiti shareholding company with a portfolio of investments in the industrial, healthcare and education sectors. The value of the deal was not disclosed, but it is one of the largest in the Kuwaiti education sector.
In addition to these transactions, NIC also advised Al Eid Food Company on M&A, acquisition financing and a capital increase, and served as an independent adviser on the consolidation of Alsafat Investment and CapCorp Investment, the merger of Boubyan Petrochemical and Educational Holding Groups, and the integration of Al Mazaya Holding Company with First Dubai Real Estate Development Company.
Best international investment bank: HSBC
HSBC has a wide presence in Kuwait, including a dedicated 20-person global banking and markets team, now part of the wholesale banking division.
During the year the team has worked with a range of Kuwaiti clients, including Kuwait Projects Company, for which it arranged a $525 million term loan in February.
It also arranged a $180 million capped forward for one local client in January and a strategic equity hedge for Agility Warehousing Company in July involving eight million shares, or 40% of Agility’s holding. The deal involved a delta placement of 5.7 million shares in target logistics company DSV for the collar banks.
Best digital bank: Kuwait Finance House
Kuwait Finance House launched several impactful digital initiatives this year, including its XTM interactive devices, the introduction of a novel digital point-of-sale system, and revamping its account-opening process. KFH also launched a platform dedicated to the small and medium-sized enterprise segment.
KFH-owned TAM is the first Islamic neobank in Kuwait. It uses features such as biometric facial recognition, has virtual digital prepaid cards and an integrated cash-back reward system. Its app has a 4.7 score on Apple’s App Store.
Some 40% of TAM’s users are newcomers to the bank.
Best bank for SMEs: National Bank of Kuwait
National Bank of Kuwait (NBK) is a dominant presence in Kuwait’s small and medium-sized enterprise market, accounting for over 60% of the sector.
It works with SMEs across the board, including micro SMEs, and does not require a minimum capital level for onboarding. This approach supports the growth of small businesses and aligns with broader environmental, social and governance goals by promoting economic inclusion.
The bank’s SME customer base has grown at a consistent 10% rate over the last five years. NBK has worked with more than 90 SMEs that now require more comprehensive corporate services, evidence of its effectiveness in nurturing businesses in this segment.
Best bank for ESGs: Kuwait Finance House
Kuwait Finance House (KFH) has focused on welfare and social responsibility over the past year, launching a sustainable financing of green products campaign, which offers 15-year financing of up to KD70,000 ($228,000) for housing and KD25,000 for consumer finance to encourage the use of environmentally friendly building materials.
KFH has also supported environmental conservation. It has collaborated with the Public Authority for Agriculture Affairs and Fish Resources (PAAFR) on afforestation and greening projects and sponsored the three-day climate change hackathon organized by the Gulf University for Science and Technology.
Elsewhere, KFH has restored 17 buildings in Al Mubarakiya at a cost of KD8 million to preserve Kuwait’s cultural heritage and improve community infrastructure. The bank’s total community investment reached KD42 million in 2023, which includes KD20 million debt relief for defaulting debtors.
KFH also extended substantial aid to earthquake victims in Turkey and Syria, contributing $20 million to relief efforts.
Best bank for corporate responsibility: Gulf Bank
Gulf Bank has worked with local communities in Kuwait to foster economic and social development. It is a key supporter of non-profit Injaz’s educational programmes and has sponsored annual competition winners in the ‘Raskla’ and ‘B-one’ programmes. This has extended to training the winning teams for the regional Injaz competition in Qatar, which involves 14 other Arab countries.
Gulf Bank is also the main sponsor of the Qout Market, a Kuwait-based artisanal farmers market, the largest of its kind and supporting local agriculture and crafts.
The bank is also involved in distributing Iftar meals, in collaboration with the Kuwait Food and Relief Bank, and supported the Red Crescent Society by providing electrical appliances to economically challenged families across the state.
Best bank for diversity & inclusion: National Bank of Kuwait
National Bank of Kuwait (NBK) has supported diversity and inclusion across the country this year. It has expanded its ‘Bankee’ programme, which reached 16,180 students across Kuwait’s public and private schools to equip them with essential financial skills.
The bank has redesigned all its banking cards to assist customers with visual impairments and has launched the ‘She’s next’ initiative in partnership with Visa, to support women-owned small businesses. Successful applicants receive a $50,000 grant and a comprehensive support package, including a year of business coaching from the International Trade Centre and $3,000 in Amazon Web Services credits.
