Kuwait banks have strong liquidity, capital buffers to sustain economic growth
. . . financially strong to sustain lending despite regional and economic challenge
• Al-Marzouq says robust capital buffers, prudent risk management and strong regulatory oversight underpin banks’ resilience and lending capacity
Kuwait’s banking sector maintains strong financial positions, high liquidity levels and solid capital adequacy, reinforcing its ability to withstand economic and financial challenges while continuing to finance economic activities and support national development, Chairman of the Kuwait Banking Association Hamad Al-Marzouq said Friday.
In a press statement, Al-Marzouq emphasized that the strength of banks’ financial positions must be assessed through a comprehensive evaluation of liquid assets, funding sources and their stability, rather than focusing on individual balance-sheet items in isolation.
He explained that banks manage liquidity by deploying financial resources efficiently while balancing the need to maintain liquid assets with financing requirements, in line with prudential supervision and established risk-management frameworks.
Al-Marzouq highlighted the role of the Central Bank of Kuwait (CBK) in maintaining the sector’s resilience through a sophisticated regulatory framework aligned with international financial safety and risk-management standards. These include capital adequacy requirements, the Liquidity Coverage Ratio (LCR), the Net Stable Funding Ratio (NSFR), stress testing and continuous assessments of asset quality and funding stability.
He noted that Kuwaiti banks maintain liquidity and capital adequacy levels comfortably above regulatory requirements. The CBK had previously reaffirmed the strength of the sector when it announced stimulus and precautionary measures in March 2026.
According to Al-Marzouq, those measures reflected a proactive supervisory approach designed to strengthen the banking sector’s flexibility in responding to economic and regional developments while ensuring the continued flow of financing to the national economy.
He stressed that temporary adjustments to certain supervisory requirements should not, in themselves, be interpreted as evidence of weakness in banks’ financial positions. Instead, they demonstrate the flexibility of precautionary tools and their ability to respond to changing economic conditions.
Al-Marzouq added that the resilience of a banking sector cannot be judged solely by changes in individual financial balances. Its true strength lies in the soundness of banks’ financial positions, asset quality, capital adequacy, stability of funding sources and efficiency in managing liquidity and risks, as well as their ability to meet obligations and sustain banking services.
Addressing the outlook for lending, he said Kuwaiti banks possess the financial and operational flexibility required to manage their resources and regulatory obligations efficiently and continue supporting financing needs in the coming period. He added that any future changes to precautionary requirements would be introduced within approved regulatory frameworks, taking into account the need to preserve financial stability and ensure the sustainability of banking operations.
The continued growth of credit and deposits, according to the latest official data, further reflects the sector’s capacity to perform its financial intermediation role, mobilize savings and channel resources into productive economic activities. Al-Marzouq said these functions remain essential to supporting economic growth and meeting the financing needs of individuals, businesses and various productive sectors.
He concluded that the sector’s strong financial and regulatory foundations, supported by prudent supervision and effective risk management, would enable Kuwaiti banks to continue financing development projects and economic activities while strengthening Kuwait’s position as a reliable and stable financial and banking center.
