In an interview with Arab Banker Magazine, Kuwait Finance House (KFH) Acting Group Chief Executive Officer, Abdulwahab Iesa Al Rushood said that the landmark cross-border acquisition of Ahli United Bank - Bahrain is one of the largest deals in the region. He noted that it is considered a significant milestone in the history of the Kuwaiti banking sector, setting the stage for a new era led by KFH.

He added that the motivating factor behind the acquisition and merger, the largest-ever merger in Kuwait's banking sector, was the ambition to enhance the position of the Group regionally and globally.

“This strategic step brings several benefits. It has created a stronger financial institution that can support various sectors of the economy through an increased financing capacity of more than KWD 500 million ($1,6 bn) for a single client, investment in new projects and further support for small and medium enterprises. All of which will benefit Kuwait’s economy”, Al Rushood noted.

He pointed out that the acquisition of AUB - Bahrain not only strengthens the banking sector, but also plays a vital and crucial role in advancing Kuwait’s broader economic and development objectives through the potential it creates to provide funds to various projects and businesses both directly and indirectly.

The recent acquisition and merger with AUB are another significant milestone, solidifying KFH's position as both the largest bank in Kuwait in terms of Market Cap and the world's second-largest Islamic bank by assets. This strategic move marks a new chapter in KFH's growth trajectory and is a key historic achievement. “It is worth mentioning that KFH is a full-service bank offering retail, corporate, treasury and private banking and wealth management services. The Gorup currently operates in 12 countries around the world,” he said.

Digital transformation

Speaking about KFH’s Digital Transformation strategy, Al Rushood indicated that Tam digital bank is the first Sharia-compliant digital bank in Kuwait launched in October 2023.

He explained that the initial strategy of Tam was to cater to the youth demographic with services and products compatible for their lifestyle and needs.  Currently, Tam allows customers starting from 15 years of age to onboard end-to-end digitally and automatically issue a digital debit card upon account opening.  This enables users to easily send and receive money.

 Al Rushood mentioned another product KFH offers which is the Tam digital prepaid card. “Users can start to enjoy the benefits instantly,” he remarked “Various other innovative products and services, such as credit cards and personal financing, are also in the development pipeline as we expand the business line to cater for the salaried demographic. Tam has biometric facial recognition built into it and we are also considering leveraging AI to further personalize our digital offering to our customers.”

Larger funding base

With regards to the Sukuk programme, Al Rushood indicated that in January KFH announced the successful issuance of a 5-year Senior Unsecured Sukuk of US$1 bn, which was extremely popular and more than three times oversubscribed, attracting orders exceeding $3.45 bn.

He mentioned that the aim of this issuance was to enable KFH to access a wider pool of capital, diversify its funding base, support international expansion plans and enhance its brand recognition. Additionally, it gives KFH the opportunity to increase its investment capabilities and support Kuwait’s infrastructure projects and other sectors in the country, as well as help corporate customers with their expansion plans both regionally and globally.

Al Rushood stressed the Bank’s goal of becoming a ‘top 100 global bank’, “Our ambitious vision created by KFH's Board of Directors is targeting a place among the top 100 global banks within the next decade.

Al Rushood said that the future of global banking in 2025 is likely to be shaped by digital transformation, collaboration, and regulatory changes. While there are bright spots in terms of technological advancements and customer-centric services, banks will need to navigate through various challenges to stay competitive and adapt to the evolving landscape.

“Overall, the outlook for global banks remains steady. This resilience is largely due to solid capitalization, improved profitability, and still sound asset quality.” he remarked.