Kuwait’s banking sector witnessed healthy year-on-year growth, observing notable increase across multiple identified key performance indicators such as net provision charge on loans, capital adequacy ratio, and coverage ratio on stage 3 loans, according to top tax advisory firm KPMG.

Underlining the sustained resilience of the banking sector in the region, KPMG published the ninth edition of the GCC listed banks’ results.

The report, titled Adaptation and growth, offers a succinct analysis of the leading listed commercial banks’ financial results for the year-ended December 31 versus the previous year (year-ended December 31, 2022).

KPMG said the solidity of the GCC economies shined through despite global economic challenges as the region lodged double-digit growth (23.1%) in terms of net profit to hit $53.2 billion in 2023.

Total assets and share prices in the region surged by 8.1% and 7.7%, respectively.

Also, in the green, albeit marginal, were capital adequacy ratio, cost-to-income ratio, net interest margin (NIM), return on equity and return on assets.

The region saw a decrease in the overall non-performing loan (NPL) ratio, driven by banks conservative approach to credit risk management, according to KPMG report.

The main highlight of the report remained the positive trend in each of the identified financial KPI, helmed by effective management, digital transformation, and improved return on investments.

On the future outlook, KPMG professionals said they predicted effective NPL management, rapid balance sheet growth, healthy NIMs and measures to maintain cost control.

They also anticipate that, in 2024, the banking sector will see a rise in the prominence of ESG, focus on AI and Regtech, and consolidation.

KPMG