A recent report by Moody’s Investors Service highlights the continued strength of the Kuwaiti banking sector, with total assets reaching KD 92 billion (approximately $297 billion) as of December 31, 2024.
Local private sector deposits remain the sector’s primary funding source, making up 43% of total liabilities and shareholders’ equity.
Moody’s praised the robust support environment provided by the Kuwaiti government, noting its consistent track record of preventing bank defaults, reports Al-Rai daily.
The report emphasized that Kuwaiti banks operate within a sound operational and regulatory framework—supported by a wealthy economy, large oil reserves, and strong supervision by the Central Bank of Kuwait, which uses the CAMEL-BCOM7 rating system.
Between 2020 and 2024, banking sector assets grew at a compound annual rate of 6%, driven by local private sector claims that reached KD 47 billion—52% of total assets. Foreign assets surged from KD 16 billion in 2020 to 28 billion in 2024, growing at 14% annually. Meanwhile, the loan-to-GDP ratio dropped from 114% to 95% due to strong nominal GDP growth outpacing credit growth.
Looking ahead, Moody’s projects a 5–6% credit growth rate in 2025, spurred by continued government spending on major infrastructure projects, including Mubarak Al-Kabeer Port, Sabah Al-Ahmad City, and the new airport terminal.
Kuwait’s recent Decree-Law No. 60 of 2025 on Financing and Liquidity sets a public debt ceiling of KD 30 billion and authorizes long-term financial instruments. Additionally, a draft mortgage law is underway to boost affordable housing access and deepen financial reforms.
The resident loan portfolio is primarily composed of personal loans (39%) and loans to the real estate and construction sectors (26%). While foreign liabilities accounted for just 14% of total liabilities by end-2024, the banking sector’s foreign assets were higher, reinforcing its financial resilience.
With credit growth surpassing deposit growth, the loan-to-deposit ratio rose above 90%. Market financing reached 23% of tangible banking assets. Nonetheless, banks continue to rely heavily on stable, low-cost domestic deposits.
Finally, ATM numbers held steady at 2,772 across Kuwait, and total plastic card transactions reached KD 11.78 billion in Q4 2024—KD 11.04 billion spent domestically and KD 0.74 billion spent abroad.
