Financing the needs and ambitions of Kuwait

Kuwait

Sheikh Ahmad Duaij Al Sabah, chairman of the Commercial Bank of Kuwait (Al-Tijari), talks to The Energy Year about financing key development projects in Kuwait and the GCC and the bank’s commitment to building strong relationships with its clients. Al-Tijari is a Kuwaiti bank that provides financial, banking and investment products and services to corporate and retail customers.

What were the drivers of Al-Tijari’s performance in 2023 and how does the bank plan to support Kuwait’s economic development?
Our solid performance in 2023 was maintained by the rise of interest rates globally, a factor that favoured the banking sector as a whole. Moreover, our asset quality is also very high, and our profits reflect that as well. We are looking forward to another positive year in 2024, with more finance being directed to the energy industry and the industrial sectors as this has always been a key focus for us and the country.
Al-Tijari has always moved in line with the needs and ambitions of Kuwait and we feel very positive about our capabilities to support the government. For example, our team has been a leader in the PPP sphere and we are deeply committed to initiatives that can play a role in advancing the country’s economic outlook. Our in-house expertise in PPP schemes sets us apart from other banks; we know the ins and outs of such projects and can move faster than competitors to provide tailored financing.

What are your thoughts on the pipeline of projects that Kuwait intends to carry out?
Al-Tijari seeks to be a major partner for the government in bringing to light projects that are key to the country’s welfare. We are providing financing for the GCC Railway and the Kuwait-Riyadh high-speed line, and we are also involved in Mubarak Al Kabeer Port, which is under construction on Boubyan Island off Kuwait’s northern coast.
We also have a part in several undertakings that are part of KPC’s plan to invest KWD 10 billion [USD 32.5 billion] into capital projects. They include, among other ventures, new oil and gas gathering centres and the development of Kuwait’s first offshore gasfields in the Divided Zone shared with Saudi Arabia.
I believe it would be very interesting if, on the heels of Saudi Arabia’s listing of Aramco, KPC issued a small float to allow nationals to participate in its growth and help the KPC raise capital for its investment plans. Stock listings are beneficial for governance, transparency and professionalism.

How does Al-Tijari pursue innovation and introduce new banking products?
Bureaucracy in Kuwait is a hindrance but, in line with ongoing trends in the GCC region, the country is taking giant steps towards digitisation and overcoming most of the challenges that red tape and slow decision making often entail.
On our part, in February 2024 we inked an agreement with Network, a leading e-commerce player in the Middle East, which will enhance our payment products, card management services and fraud-detection systems. It will provide a big boost to our overall digital transformation endeavours. We immediately clicked with them because we realised how much we could learn from each other and how mutually beneficial our collaboration could be. We are looking forward to further integrating their technologies into our services.
One of Al-Tijari’s core principles is to constantly seek knowledge and progress. We do not believe in the concept of transition per se because our philosophy is that we are in a perpetual state of evolution and development.
The Commercial Bank of Kuwait has a history of innovation in banking services. We were the first to introduce ATMs in Kuwait in the 1970s and one of the first banks to understand the impact that digitisation would have on the banking sector. We prepared in advance and now the whole spectrum of our services can be accessed on our apps with a tap.

What is your assessment of the domestic banking sector and the opportunities ahead for Al-Tijari?
It’s a competitive market, but there is collaboration at the same time. Collaboration comes in the form of the Kuwait Banking Association, of which I am the chairman and many other different initiatives that enhance the performance and product offerings of Kuwaiti banks.
Generally speaking, domestic banks had strong results in 2023 and I am optimistic about the market’s trajectory in the foreseeable future. Some banks have expanded abroad. KFH [Kuwait Finance House] and AUB [Ahli United Bank] have merged into the second-largest Islamic bank in the region. There is a good base for favourable developments and progress in the Kuwaiti banking sector.
As far as Al-Tijari’s operations abroad are concerned, our teams go to Riyadh on a monthly basis because we are trying to provide financial support for the mega-projects Saudi Arabia has in the pipeline. We are nurturing our relationship with the Saudi government and pushing our lending capacity to help fulfil their ambitions.
We are not directly on the ground and it is somewhat difficult to deal with local commercial entities, but we are assessing projects that enjoy support from the government via the sovereign wealth fund or the ministries of finance or tourism, for instance. The GCC is deeply interlinked and this link will only deepen. We work to be a part of it as well.

What makes Al-Tijari stand out in Kuwait and what do you see in the bank’s future?
We stand out for our strong relationships with our clients. We see ourselves as partners and mini-consultants. It is not just a funding relationship where we say, “Here is your loan. See you next year or at the next instalment.” We have business in several different sectors, and we have a more holistic view of the economy than most of our clients. We share our know-how and information with them and advise on opportunities, rather than just signing loan agreements. This is what keeps them loyal to us for the long term.
We want to digitise further and are becoming very tech-savvy to improve our customers’ experience by cutting down on waiting times and friction. I see us growing and generating profits without sacrificing the asset quality and prudence that have always characterised us.

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