Kuwait banking sector records highest growth in total assets
With banks looking to navigate through pandemic driven difficulties toward economic recovery and stability, KPMG published the eighth edition of its GCC listed banks’ results. Titled ‘Cautious optimism,’ the report offers a thorough analysis of the financial results and key performance indicators (KPIs) of leading listed commercial banks in the region, in comparison with the previous year, to highlight the main financial trends in the GCC countries.
Bhavesh Gandhi, Partner and Head of Financial Services, KPMG in Kuwait, said, “There are promising indicators of steady financial growth in Kuwait. Our results point out double-digit y-o-y growth in total assets and net profit by average in Kuwait, which is optimistic considering banking sector in the country is fresh off the COVID-19 crisis. It is expected that banks will press forward aggressively in certain aspects, such as digital transformation, but the collective disposition for growth will remain cautious.” Compared to 2021, Kuwait’s banking sector witnessed the highest y-o-y growth in terms of total assets (by average) in the region, climbing by 21.4 percent. Kuwait’s banking sector’s net profit (by average) also had the most significant growth rate in the region, increasing by 36.3 percent to reach 412.9 percent for the year 2022. Kuwait’s banking sector’s y-o-y growth with regard to coverage ratios on stage 3 loans was also the highest, rising by 7.1 percent compared to 2021. Albeit marginal, Kuwait’s banking sector’s returns on equity and assets grew by 0.8 percent and 0.1 percent, respectively.
In terms of average capital adequacy ratio, the banks in Kuwait had a healthy percentage of 17.3 percent, compared to the 18.3 percent in 2021, and well above the 12 percent limit required by the Central Bank of Kuwait. However, the banks in Kuwait saw an increase in the cost-to-income ratio which went up by 4 percent to reach 46.6 percent, compared to the 42.9 percent in 2021.
The following salient findings emerged from the financial results’ analysis for the year-ended 31 December 2022 for the GCC region as a whole:
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