KUWAIT CITY, October 29: Shaikha Al-Bahar, Group Deputy CEO of National Bank of Kuwait, conveyed optimism about the robust outlook for Kuwait’s economy and anticipated improvements in the business environment in the near term. She highlighted that a stable political climate is expected to positively influence decision-making, thereby accelerating government spending on infrastructure projects.

In an interview with Bloomberg TV on the sidelines of the Future Investment Initiative (FII) conference in Riyadh, which launched yesterday, Al-Bahar stated, "With the National Assembly dissolved, decision-making now rests solely with the government, streamlining the process. We see that the government is genuinely committed to advancing economic reforms and launching mega projects, particularly in infrastructure, which will positively impact Kuwait’s economy."

Al-Bahar highlighted the notable surge in project awards recently, noting that approximately $6 billion worth of projects have been awarded in 2024, with an additional $5 billion expected to be awarded in the near term. This activity opens up opportunities for both international and local companies, stimulates the lending environment, and drives overall market growth.

Al-Bahar emphasized that the reform trajectory is on the right track, paving the way for a real economy and significantly expanding opportunities for private sector contributions. These efforts align with Kuwait’s Vision 2035, which prioritizes private sector participation in driving economic development.

IPOs

Al-Bahar highlighted the momentum in Kuwait's IPO and listing market, stating, "We are now witnessing a framework for Public-Private Partnership (PPP) projects, with companies emerging from these collaborations moving towards initial public offerings and stock exchange listings. This approach will contribute to enhancing capital market activity."

"I believe that many family businesses will opt for listing, driven by their interest in establishing better governance and clearer strategic direction." Al-Bahar added, expressing optimism about increased activity in family business listings, given the positive climate in Kuwait.

Boubyan and Gulf Bank

Commenting on the ongoing merger discussions between Boubyan Bank and Gulf Bank, Al-Bahar stated, "As the largest shareholder in Boubyan Bank, NBK supports this initiative. However, our endorsement is contingent upon the merger providing added value for our shareholders. A final assessment of the transaction’s viability will follow the recently initiated due diligence process."

Al-Bahar also highlighted that NBK holds a unique position among Kuwaiti banks by offering both conventional and Islamic banking services, aiming to further expand its Islamic banking offerings through Boubyan Bank.

Navigating a Lower Rates Environment

Al-Bahar emphasized that while the downward trend in interest rates presents challenges for banks profitability, it also stimulates increased borrowing, particularly by large corporations amid expanding business activities. This uptick in borrowing could help to counterbalance the pressure on bank earnings created by the low-interest rate environment.

The Saudi Market

Al-Bahar highlighted NBK’s strategic interest in the Saudi market, emphasizing that NBK, as a global bank with a strong presence in diverse markets, is currently concentrating on the GCC region—particularly Saudi Arabia, which stands out as one of the most significant growth markets for NBK Group’s international operations.

She noted that NBK caters to a wide range of sectors within the Saudi economy, serving government-related entities, large corporations, and family-owned businesses. Additionally, the bank has established robust relationships with numerous clients across various sectors in the Kingdom.

Al-Bahar emphasized that NBK Group is actively pursuing the growth of its wealth management business in the Kingdom through NBK Wealth. The bank is also focused on expanding its offerings to clients by introducing a range of funds and other wealth management services.

Furthermore, she highlighted that NBK is actively engaged in this year's edition of the FII taking place in Riyadh, represented by a significant delegation. Throughout the conference, the delegation held numerous meetings and successfully concluded several financing agreements with prominent Saudi companies across various sectors, underscoring the bank's strong commitment to supporting Saudi Vision 2030.

Besides the Saudi market, NBK is also focused on the Egyptian market, which is one of the Group's key growth areas.

Geopolitical risks

On the topic of geopolitical risks and their implications for the economies of the GCC region, Al-Bahar remarked that these challenges are not unfamiliar to the area. She underscored that, despite the increasing tensions, the macroeconomic impacts have predominantly remained confined to the countries directly engaged in the conflict.

Al-Bahar highlighted that the circumstances for GCC countries are unique, as they consistently demonstrate resilience in navigating crises, particularly through government support provided to various economic sectors during challenging times.

She referenced the support provided by the Government of Kuwait during the COVID-19 crisis, which involved postponing and easing restrictions for banks and SMEs. She also highlighted the enactment of legislation to guarantee bank deposits during the global financial crisis of 2008.