Press Releases

The Central Bank of Kuwait’s (CBK) Governor, Dr. Mohammad Y. Al-Hashel, stated that the 2021 financials of Kuwaiti banks underscore the resilience of the banking sector and its ability to withstand crises and serve the national economy efficiently without interruptions. The Governor stressed that this was evident in the Kuwaiti banking sector’s financial soundness indicators; Capital adequacy, liquidity, asset quality, and profitability, and supported by the positive results of the stress tests that CBK conducts on a regular basis.

The Governor noted that the consolidated balance sheet of the Kuwaiti banking sector continued to grow, with assets growing from KD 85.4 billion to a historic high of KD 91.0 billion (an increase of 6.5%). He added that the increase in total assets was driven by growth in net credit facilities that came close to KD 56 billion in 2021 on a consolidated basis, growing by KD 4.1 billion (an increase of 8%).

In terms of financial soundness indicators and starting with Asset Quality , the Governor stated that it is at its best state ever, where the Non-Performing Loans (NPLs) Ratio dropped to a historical low of 1.4%, down from 2% in 2020. He added that banks used part of the provisions to write-off bad loans. Meanwhile, the NPL Coverage Ratio (provisions to NPLs) reached a record high of 310%.

With regard to Solvency , the Capital Adequacy Ratio (CAR) stood at 19.2%, comfortably above the international requirements of 10.5%. The Governor stated that the CAR recorded in 2021 is the highest since the implementation of Basel III instructions.

In terms of Liquidity , the Governor noted that the ample supply was supported by the CBK’s prudent interest rate and exchange rate policies that helped retain savings, while simultaneously ensuring the regular and continuous flow of liquidity between banks and the sectors of the national economy. The Liquidity Coverage Ratio and Net Stable Funding Ratio stood at 183% and 111% respectively, against a minimum requirement of 100%.

Moving on to Profitability , the Governor said profit levels have neared pre-pandemic levels, with banks’ net profits coming close to KD 961 million.

For added reassurance on the banking sector’s resilience, the CBK conducted stress tests based on a newly introduced stress-testing framework developed in accordance with international best practices. The framework takes into consideration several micro- and macro-economic variables based on three scenarios of differing severity covering a forward-looking three-year period to assess the sector’s ability to withstand shocks and operate under harsh conditions. The tests revealed high resilience where the CAR stood at 12.6% by end of 2024, a relatively high level above the international minimum requirements despite the severity of the scenarios adopted for the tests.

In conclusion, the Governor reiterated that the Kuwaiti banking sector, two years after the onset of the pandemic, demonstrates better conditions and more resilience that enables it to face challenges from a position of strength. He also emphasized the CBK’s continuous vigilant monitoring and close supervision to fortify the regulated units, by proactively strengthening the sector to maintain monetary and financial stability.