Moody’s Investors Service reported that Kuwait remains one of the largest Islamic finance markets globally, with Sharia-compliant financing assets reaching $109 billion in 2024, up from $85 billion in September 2021.
The country’s banking landscape comprises 10 local banks — five conventional, four fully Islamic, and one focused on industrial development.
As of March 2025, Kuwait Finance House (KFH), bolstered by its merger with Ahli United Bank, became the country’s second-largest bank, controlling 32% of total banking assets, according to Al-Rai daily.
The agency projects sustained growth in Kuwait’s non-oil GDP — estimated between 3% and 3.5% in 2025 — driven by government investment and recovering consumer spending.
This will fuel banking sector expansion, especially for Islamic institutions expected to outperform conventional banks due to their integral role in financing large-scale infrastructure initiatives under Kuwait’s Vision 2035.
Digital transformation is also reshaping the sector. Since the Central Bank of Kuwait issued digital banking guidelines in February 2022, several major banks have launched digital platforms. These include NBK’s “Weyay” (Kuwait’s first digital bank), Boubyan Bank’s “Nomo”, and KFH’s “Tamm Bank”, further advancing Islamic fintech in line with GCC-wide trends in digital innovation and increased venture capital activity.
Moody’s emphasized that Kuwait’s Islamic banks have shown double-digit growth — averaging 10% from 2019 to 2024 — compared to 5% for conventional banks.
This superior performance is attributed to rising demand for Sharia-compliant products from both corporate and retail customers. Islamic banks in the GCC, including Kuwait, are expected to maintain strong capital and liquidity positions, higher profitability margins, and continued growth supported by government policies and economic momentum.
