26/10/2026 04:27 AST
National Bank of Kuwait (NBK) held its Third Quarter 2026 Earnings Conference Call with analysts and investors to discuss its financial results for the third quarter and first nine months of 2026. During the call, Isam J Al-Sager, Vice Chairman and Group CEO of NBK, reviewed the operating environment, key developments and financial results, as well as the economic outlook across Kuwait, the region and global markets.
Al-Sager began by highlighting the Bank's financial performance, noting that NBK reported a net profit of KD 481.7 million in the first nine months of 2026, compared to KD 467.4 million in the corresponding period of 2025.
He added that net operating income grew by 3.8 percent year-on-year to exceed KD 1 billion, emphasizing that this growth reflects the strength of the Bank's diversified business model and extensive geographic footprint, supporting its solid performance despite challenging operating conditions. Al-Sager noted that return ratios remained strong, with return on average assets standing at 1.39 percent during the first nine months of 2026, while return on average equity reached 13.9 percent.
On the strategic front, Al-Sager highlighted the Bank's continued progress in advancing its digital transformation agenda and strengthening innovation capabilities. He explained that during the third quarter of 2026, NBK expanded its end-to-end digital banking services across more key consumer banking products, introducing Kuwait's first fully digital loan journey, alongside digital account opening for children and a fully digital credit card application and issuance process.
Al-Sager emphasized that diversification of the Group's business activities and revenue streams remains a key pillar of NBK's strategy, supported by its extensive regional and international presence, wealth management business, and Boubyan Bank, the Group's Islamic banking arm.
He noted that during the third quarter, NBK further expanded its presence in the GCC with the opening of a branch at the Qatar Financial Centre, strengthening client relationships in a market where the Bank has maintained an established presence for many years.
On sustainability, Al-Sager reaffirmed NBK's commitment to integrating environmental, social and governance (ESG) principles across the Group's businesses and operations. He highlighted that, as of September 2026, the Bank had reached 60 percent of its $10 billion sustainable finance target for 2030, reflecting effective execution and its commitment to sustainable long-term growth.
Looking ahead, Al-Sager emphasized that NBK's strong market position and robust performance provide a solid foundation for sustained growth and reinforcing its leadership in Kuwait. He noted that the Bank's strong capital base and liquidity position provide the capacity to expand lending as economic activity recovers, while its longstanding, trust-based relationships with the public and private sectors continue to position NBK at the forefront of financial institutions supporting Kuwait's investment plans, infrastructure development and economic transformation.
Domestic operating environment
Commenting on Kuwait's economic landscape, Al-Sager noted that economic activity regained momentum following a slowdown in the second quarter. Oil production rebounded significantly from its earlier lows, although output remained below pre-conflict levels, with the pace of further recovery dependent on export conditions.
Meanwhile, he highlighted the greater resilience of non-oil activity, supported by progress in implementing Kuwait's development agenda and a notable pickup in tendering activity across the utilities, infrastructure and energy sectors.
Al-Sager stated that significant progress had been made during the year on legislative and economic reforms. He added that these developments, together with Kuwait's strong financial position, were positively assessed by credit rating agencies, contributing to the affirmation of the country's sovereign credit ratings.
Al-Sager also noted that the mortgage financing law had been approved and published in the Official Gazette, with its implementing regulations expected to be issued shortly. He expected lending activity under the newly approved mortgage financing law to gain momentum gradually, with the full potential for growth emerging over the longer term as more housing units become available for distribution.
In the meantime, he indicated that lending activity is expected to pick up outside the scope of the mortgage financing law, as more work is directed towards infrastructure projects and the development of these new residential cities.
Project awards
Al-Sager noted that project award activity maintained its momentum, with the total value of projects awarded reaching approximately KD 3 billion during the first nine months of 2026. He also highlighted that the third quarter attracted significant international investment into Kuwait's infrastructure sector, which he described as a strong indication of investor confidence in the country. Al-Sager emphasized that the investment outlook remains promising, supported by the continued issuance of tenders and expectations of further project awards.
Resilient business model
Sujit Ronghe, Group Chief Financial Officer of NBK, stated that the Group continued to deliver strong financial and operating performance during the first nine months of 2026, despite persistent economic uncertainty and heightened regional geopolitical tensions since the end of February. He emphasized that the Group's resilient business model, diversified revenue streams and extensive geographic footprint have strengthened its ability to navigate challenges while maintaining robust profitability.
Ronghe explained that the Group reported a net profit of KD 481.7 million for the first nine months of 2026, representing a 3.1 percent increase compared to the corresponding period of the previous year. Third-quarter net profit reached KD 156.9 million, also up 3.1 percent year-on-year, supported by stable operating performance and a relative decline in net credit provisions and impairment losses.
He added that net operating income increased by 3.8 percent year-on-year to KD 1 billion, supported by a strong contribution from non-interest income, which accounted for approximately 25 percent of total operating income, reflecting the continued balance of the Group's revenue mix. Non-interest income rose by 14.2 percent to KD 251.4 million, while fees and commissions income grew by 11.9 percent to KD 181.6 million, reflecting solid contributions across the Group's business segments and operating markets. Ronghe noted that growth in fees and commissions income was primarily driven by asset management, lending and cards businesses, with card-related income benefiting from increased travel activity and flight operations during the summer season in the third quarter. Foreign exchange gains of KD 40.7 million also supported revenues, benefiting from improved transaction volumes and favorable exchange rate movements.
He highlighted that international operations and Islamic banking, the two key pillars of the Group's diversification strategy, collectively contributed approximately 39 percent of total Group profits, reflecting the success of NBK's geographic and operational diversification strategy.
Ronghe explained that continued issuance of Kuwaiti dinar-denominated government treasury bonds contributed to a gradual increase in the share of interest-earning reserves held with the Central Bank of Kuwait, providing some support to net interest income and net interest margin. He expressed the Bank's expectation that debt issuances would continue, creating opportunities to deploy liquidity into higher-yielding assets with the Central Bank of Kuwait.
Turning to the balance sheet, Ronghe stated that the Group's total assets reached KD 46.9 billion as of the end of September 2026, representing a 4.5 percent year-on-year increase. Gross loans and advances grew by 8.2 percent year-on-year to KD 28.2 billion, with loan growth primarily driven by the Kuwaiti market, alongside contributions from international operations despite the challenges posed by regional developments. Customer deposits increased by 13.5 percent year-on-year, with growth coming from both Kuwait and overseas markets, although Kuwait accounted for the larger share.
He reaffirmed that asset quality remained stable, with the non-performing loan (NPL) ratio remaining low at 1.29 percent and the NPL coverage ratio standing at 236 percent, reflecting the Group's prudent approach to risk management and provisioning.
Ronghe explained that the Bank maintains credit provisions of KD 940 million in accordance with Central Bank of Kuwait (CBK) requirements, compared to expected credit loss (ECL) requirements of KD 713 million. Accordingly, provisions held on the balance sheet under CBK regulations exceed ECL requirements by KD 227 million, providing a comfortable buffer that enables the Group to absorb any potential adverse impacts arising from the prevailing conditions.
He added that the Group maintained strong liquidity levels in line with Basel III requirements, with the liquidity coverage ratio (LCR) standing at approximately 163 percent and the net stable funding ratio (NSFR) at 107 percent, both exceeding the original minimum regulatory requirements.
Looking ahead, Ronghe expressed cautious optimism regarding the overall stability of the operating environment over the coming quarters, despite ongoing challenges. He noted that the Bank's loan growth guidance for 2026 remains in the mid- to high-single-digit range, emphasizing that the overall quality of NBK's credit portfolio remains strong.
Ronghe also expected recoveries recorded during the first nine months of 2026 to help reduce net provisions charged to the Group's full-year results.
Kuwait Times
Please wait...