August 2025, Kuwait: In continuation to the yearly performance report published in April 2025, KPMG Kuwait published it’s Kuwait-specific half-yearly banking report summarizing the financial performance of the country’s listed banks in H1’2025. Titled Kuwait listed banks’ results – H1’2025, the report offers a comparative analysis of Kuwait’s nine listed commercial banks’ financial results for half year ending June 2025 (H1’2025) versus half year ending 30 June 2024 (H1’2024).
Banks in Kuwait closed H1’2025 strong, with the country’s average growth (y-o-y) in terms of total assets (10.38%) and net profit (3.63%). The report also pointed that four out of nine banks saw a decrease in cost-to-income ratio in H1’2025 as compared to H1’2024. Along with the positives, KPMG’s analysis also indicated a downward trend in the country average with respect to return on assets and return of equity, with both indicators dipping to -0.25% and -0.02%, respectively.
The biggest shift in H1’2025 compared to H1’2024, however, was in terms of the overall share prices where every bank marked a double-digit increase, moving the country average to a whopping 22.94% from the same time last year.
Summarizing Kuwait’s banking sector’s performance for the last six months, Bhavesh Gandhi, Partner and Head of Financial Services, KPMG Kuwait, said:
Despite the ramifications of global reciprocal tariffs announced by the US earlier this year, and the overall geopolitical situations in the wider Middle East region, the banks in Kuwait stayed resilient and witnessed steady growth in terms of net profit and total assets. We have also witnessed an increased focus on cost-management across banks in Kuwait. Banks are leveraging AI as an automation tool to reduce operational costs witnessed in the half-yearly results.
The KPMG publication probed deeper into the banks’ performance based on eight key performance indicators (KPIs) to identify any underlying themes that could play a part in shaping Kuwait’s banking industry. They were: (1) total assets; (2) net profit; (3) share price; (4) return on equity; (5) return on assets; (6) cost-to-income ratio; (7) loan by stage; and (8) non-performing loan ratio.
Speaking further about the country’s banking sector, Bhavesh added, “The most-significant trend-setter for H1’2025 was the announcement of the potential merger between Warba Bank and the Gulf Bank. The merger going through would mean Gulf Bank’s potential transition into a Sharia-compliant Islamic bank, taking the number of Islamic banks in Kuwait to five (out of nine) — with Islamic banks holding ~50% of the country’s total banking assets. We are keeping a keen eye on the latest developments in this regard and will keep you apprised through the subsequent editions of this report.”
Another noticeable development in the sector was the release of the Executive Bylaws around Domestic Minimum Top-Up Tax (DMTT) which exposed Kuwait’s banking sector (only eligible banks) to further changes. These Bylaws establish the operational framework for the DMTT Law, broadly aligned with the Organisation for Economic Co-operation and Development’s (OECD) Global Anti-Base Erosion (GloBE) Model Rules, while incorporating Kuwait-specific provisions. Due to the implementation of the DMTT Law in Kuwait, the anticipated changes are likely to influence operations, financial planning, and financial reporting in the Kuwait banking sector.
The KPMG report concluded that while there is no universal solution that banks could adopt to bring about cost reduction, the expectation is that they might take a sharper lens to their spendings and look for more ways to minimize them.
For more details, visit kpmg.com/kw.
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