Overview of Banks in Kuwait
Presently, Kuwait is under the supervision of the Kuwait Central Bank with 11 local commercial banks including 5 Islamic banks. There are various global MNC’s (Multi-National Corporations operating in Kuwait such as Citigroup, HSBC, etc. The Industrial Bank of Kuwait offers finance for industrial and agricultural related projects. Two specialized government-owned banks offer medium and long-term financingLong-term FinancingLong term financing means financing by loan or borrowing for a term of more than one year by way of issuing equity shares, by the form of debt financing, by long term loans, leases or bonds, done for usually extensive projects financing and expansion of the company.. They do focus on Credit and Savings bank facilities to its customers and ensuring a smooth money supply in the economy.
Structure of Banks in Kuwait
The banking structure in Kuwait can be shown with the help of the following diagram:
List of Top 10 Banks in Kuwait
- National Bank of Kuwait
- Kuwait Finance House (KFH)
- Burgan Bank
- Gulf Bank
- Commercial Bank of Kuwait
- AL Ahli Bank (ABK)
- Industrial Bank of Kuwait
- Kuwait International Bank
- Boubyan Bank
- Ahli United Bank Kuwait
Let’s explain each of these banks in detail –
#1. National Bank of Kuwait
It was established in 1952 termed as the first local bank and the first shareholding company in the Persian Gulf region having its headquarters in Kuwait city. The various services offered are:
- Consumer & Private Banking
- Investment Banking
- Asset Management
- Islamic Banking
- International Centre
For 2016, the bank reported total assets of $77 billion and a net profit of $976 million.
#2. Kuwait Finance House (KFH)
This institution was established in 1977 in the State of Kuwait as the first operating bank as per the Islamic Sharia (laws according to Islamic tradition). It is listed on the stock exchange of Kuwait with a market capitalization of $8.2 billion in 2016. It also manages total assets of $55.52 billion and deposits of $34.97 billion. KFH offers products and services in the sectors of Banking, Real estate, Trade finance, Investment Portfolios, and other ancillary services.
In the 1980’s KFH went through multi-activity international expansion with independent banks in Turkey, Bahrain, and Malaysia. Additionally, it has stakes in other Islamic banks with investment activities in the U.S., Europe, South East Asia, and Middle Eastern regions.
#3. Burgan Bank
This bank was established in 1977 as a subsidiary of Kuwait projects Company holdings with a network of 24 branches and in excess of 100 ATM’s. It operates the following segments:
- Corporate Banking
- Private Banking
- Retail bankingRetail BankingRetail banking or personal banking refers to the financial services offered by the financial institutions exclusively to the individual clients. The consumer banking provides personal loan, savings account, debit cards, credit cards, locker, etc.
- Treasury and Investment Banking
For 2016, the total assets reported by the bank were $24 billion with a net profit of $221 million.
#4. Gulf Bank
Established in 1960, Gulf Bank is one of the top banks of Kuwait offering services of Consumer Banking, Wholesale Banking, Treasury and financial services. It is ranked ‘A’ by leading credit rating agencies around the world. The bank has its headquarters in Safat managing a network of 56 branches around the country.
For 2016, it recorded a net profit of $143 million with an improvement in loan qualities, reduction in credit costs and Non-performing loans. The bank also enjoys a strong capital adequacy ratioCapital Adequacy RatioThe capital adequacy ratio measures the bank's financial ability to pay off its obligations. The capital-to-risk weighted assets ratio (CRAR) is evaluated as the percentage of the bank's capital to its risk-weighted assets. Bank's capital is the aggregate of tier 1 and tier 2 capital. of 18.5%. Additionally, it is strongly committed towards its Corporate Social responsibility program through which it empowers society and promoting the heritage and culture of Kuwait.
#5. Commercial Bank of Kuwait
It is the second oldest bank established in June 1960. The primary focus of the bank is towards retail and commercial project financing. It offers regular banking services such as Loans and Deposits in addition to the Card facilities to improvise digital banking across the country.
It has emerged as a lead financer towards Power, Construction and critical Infrastructure projects in Kuwait. The aim is to maximize funds of the shareholders and enlarging its customer base and also balancing out its policies to serve the community in which it operates. For 2016, it recorded a Net profit of $153 million.
#6. AL Ahli Bank (ABK)
Founded in 1967 and located in Kuwait city, ABK is an established Retail and Commercial bank with multiple branches spread across the Middle East. In addition to the regular banking services, they also offer:
- NRI services
- Investment Management
- Mutual Funds
- Leasing Services
It recorded a Net profit of $153 million for 2016 and Total Assets of $13 billion.
#7. Industrial Bank of Kuwait
It was established in 1973 in the State of Kuwait through the Ministry of Finance in combination with the Central Bank of Kuwait and other large local industrial firms with a primary objective to blossom the local industries. The headquarters are in Al-Sharq and offers conventional and Islamic Loans/Credit facilities to the Industrial sectors, conventional and Islamic Asset Management services.
They also specialize in Portfolio and Fund managementFund ManagementFund management is the process of a company taking a person's, company's, or another fund management company's financial assets (generally high net worth individuals) and investing them in companies that use those funds as an operational investment, financial investment, or any other investment in order to grow the fund. and Conventional and Islamic investments made in various sectors. For 2016, it recorded a Net profit of $30 million. They provide medium and long term financing for the establishment, expansion, and modernization of industrial units in the country. It also offers a full range of commercial banking and treasury products to meet the working capitalWorking CapitalWorking capital is the amount available to a company for day-to-day expenses. It's a measure of a company's liquidity, efficiency, and financial health, and it's calculated using a simple formula: "current assets (accounts receivables, cash, inventories of unfinished goods and raw materials) MINUS current liabilities (accounts payable, debt due in one year)" needs of its industrial customers.
#8. Kuwait International Bank
It is an Islamic bank in Kuwait was established in 1973 and is a specialized bank regulated by the Central Bank of Kuwait and listed on the Kuwait Stock Exchange. The bank offers several banking services including direct investments and credit cards. It operates various segments such as:
- Retail Banking
- Commercial and International
- Fund Management
- Institutional Banking
- Investment Management
- Islamic Banking services for Corporate Customers
For 2016, the bank recorded a net profit of $60 million.
#9. Boubyan Bank
It is a Kuwait Islamic bank established in 2004 with a paid-up capital of approximately $700 million. One of the emerging markets in Kuwait, this bank provides a variety of services to individuals and corporate customers. The main activities include accepting deposits, trading in real estate and establishing investment funds and other kinds of Islamic Transactions:
- Mudaraba [Trust Financing Contract]
- Investment Agency Contract
- Murabaha [Interest bearing loan]
- Islamic Asset management
- Direct investment in various sectors
With an employee strength of around 250, the bank recorded a Net profit of $30 million.
#10. Ahli United Bank Kuwait
This bank is a traditional unit founded in 1971 operating in the following segments:
- Retail Banking
- Corporate Banking
- Treasury & Investment
- Investment Funds
The bank is managing 110 branches across the Middle East and the United Kingdom. The net profit for 2016 was $14.26 billion and was also declared as the second safest Islamic bank in Kuwait with its headquarters in Safat, Kuwait city. Additionally, it also offers fund management and Life Insurance Services.
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