Banking - Kuwait

Kuwait

In 2024, it is projected that the Net Interest Income in the Banking market in Kuwait will reach US$36.32bn.
Traditional Banks dominate the market with a projected market volume of US$33.99bn in 2024.
The Net Interest Income is expected to show an annual growth rate (CAGR 2024-2029) of 4.06%, resulting in a market volume of US$44.31bn by 2029.
In global comparison, China is expected to generate the highest Net Interest Income of US$4,332.0bn in 2024.
Kuwait's banking market is experiencing a surge in digital banking services, as consumers increasingly opt for convenient and secure online banking solutions.

Key regions: United States, China, Japan, Brazil, United Kingdom

Definition:

The Banking market refers to the financial services sector providing financial products and services to individuals and businesses. Retail banking focuses on offering financial services to individual consumers, such as personal loans, savings and checking accounts, credit cards, and mortgages. Commercial banking, on the other hand, provides financial services to small and large businesses, including loans, lines of credit, and other financial products designed specifically for businesses.

Structure:

The market consists of two segments:
- The Traditional Banking market refers to the financial services sector that provides a range of financial products and services to individuals and businesses through store-based branches and other traditional channels.
- The Digital Banking market refers to the emerging market for digital-only banks that offer financial services through online and mobile platforms.

The market data comprises Net Interest Income, Bank Account Penetration rate, the value of Deposits, the number of depositors, the value of Loans, the number of borrowers, Credit Card Interest Income, the number of ATMs as well as the number of Bank Branches.

Additional information:

The Banking market is highly competitive and characterized by the presence of large global players as well as regional and local banks. Banks are continually seeking ways to improve their offerings and remain competitive by leveraging technology and offering innovative financial products and services. Additionally, changes in regulations and the growing trend toward digitalization are shaping the Retail & Commercial banking market, creating opportunities for new entrants, and forcing existing players to adapt.
Key players in this market are companies such as the Industrial and Commercial Bank of China Ltd., JPMorgan Chase & Co., and HSBC Holdings.

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Analyst Opinion

The Banking market in Kuwait has been experiencing significant growth and evolution in recent years.

Customer preferences: Customers in Kuwait are increasingly demanding more digital banking services, leading to a rise in online and mobile banking platforms. This shift in preferences is in line with global trends towards digitalization in the banking sector, as customers seek convenience and efficiency in their financial transactions.

Trends in the market: One notable trend in the Kuwaiti banking market is the increasing focus on Islamic banking products and services. As a predominantly Muslim country, there is a growing demand for Sharia-compliant banking options, leading to the expansion of Islamic banking offerings by financial institutions in Kuwait. This trend aligns with the broader growth of Islamic finance globally, as more customers seek ethical and interest-free banking solutions.

Local special circumstances: Kuwait's stable economy and high GDP per capita have contributed to a favorable environment for the banking sector. The country's oil wealth and government investment have bolstered economic growth and provided opportunities for banks to expand their services. Additionally, Kuwait's regulatory framework supports the banking industry, ensuring stability and security for both customers and financial institutions.

Underlying macroeconomic factors: The growth of the banking market in Kuwait can be attributed to various macroeconomic factors, including population growth, increasing disposable incomes, and government initiatives to promote financial inclusion. As the population expands and becomes more affluent, the demand for banking services is expected to continue rising. Moreover, government efforts to enhance access to financial services for all segments of society are driving the development of the banking sector in Kuwait.

Methodology

Data coverage:

Data encompasses B2B and B2C enterprises. Figures are based on Net Interest Income, Bank Account Penetration rate, the value of Deposits, the number of depositors, the value of Loans, the number of borrowers, Credit Card Interest Income, the number of ATMs as well as the number of Bank Branches.

Modeling approach / Market size:

Market sizes are determined by a combined Top-Down and Bottom-Up approach, based on a specific rationale for each market segment. As a basis for evaluating markets, we use data provided by the IMF, World Bank and the annual reports of the top 1000 Banks by asset size. Next we use relevant key market indicators and data from country-specific associations such as GDP, deposit interest rates, lending interest rates or bank account penetration rates. This data helps us to estimate the market size for each country individually.

Forecasts:

In our forecasts, we apply diverse forecasting techniques. The selection of forecasting techniques is based on the behavior of the particular market. For example, the S-curve function and exponential trend smoothing are well suited to forecast financial services for digital as well as traditional products and services.

Additional Notes:

The market is updated twice per year in case market dynamics change.