international network

Having experienced economic contractions in 2023 and 2024 primarily due to OPEC+ oil production cuts, Kuwait’s economy steadily recovered in 2025, driven by rising oil output and growth across the non-oil sector. Inflation also increased alongside this economic expansion by specific consumer goods segments, with the government’s targeted subsidies and fiscal support alleviating inflationary pressures and preserving economic stability.

Kuwait’s banking industry recorded a strong performance in 2025, marked by overall growth in total assets, profitability, strong capital and liquidity levels, and high asset quality. While the banking sector remained in this strong and stable position, the Central Bank of Kuwait (CBK) lowered its discount rate by 50 basis points to 3.50% towards the end of the reporting period, with the aim of encouraging credit expansion and stimulating further economic activity.

Against this dynamic economic backdrop shaped by both domestic and global developments, alrajhi bank Kuwait (ARBK) demonstrated resilience and agility, recording a solid performance and a strong 8% YoY growth in operating income, driven by a notable 24% YoY increase in yield income. As the sole foreign Islamic bank operating in Kuwait, ARBK also maintained its strong hold in the local market with a significant 37% YoY increase in total assets at the close of the year. The overseas branch strengthened its internal legal framework, enhanced governance standards and reinforced its focus on Kuwaitisation targets in alignment with national development priorities. These initiatives underscore ARBK’s dedication to sustainable growth, operational excellence, and its growing contribution to Kuwait’s economic vision.

Leveraging group synergies

In 2025, ARBK made significant efforts to enhance its financing and investment portfolio in order to manage and mitigate the pressure of growing funding costs, and remain competitive in the highly contested local banking environment. In collaboration with the alrajhi bank head office in KSA, the overseas branch continued to successfully participate in major syndication deals, sukuk offerings and trade finance products during the reporting period. ARBK encouraged corporate clients to leverage the alrajhi bank network for direct business transfers in order to benefit from competitive exchange rates, while at the same time adding foreign currency to the local market to increase domestic liquidity. As an extension to this service, cross-border cash transfers were also facilitated between alrajhi bank KSA customers and beneficiaries in Kuwait, regardless of their banking status with ARBK. At the close of 2025, ARBK saw an increase in corporate customers operating through its exchange house, reflecting growing confidence in the bank’s foreign exchange capabilities.

As part of the bank’s broader ‘harmonize the group’ strategy, ARBK’s card management is being moved under the group to the larger, centralised system of alrajhi bank KSA, in order to leverage its existing scale and technology for a seamless digital banking experience. The Direct investment process is also being centralised, with a secure WhatsApp communication channel being introduced for renewal reminders.

New products and innovative banking solutions

Having successfully obtained regulatory approval from the Central Bank of Kuwait (CBK) to deal with structured products in 2024, ARBK introduced capped and floor structured products towards the end of the previous financial year, allowing ARBK to tailor investments for a wide range of clients during the reporting period.

Following the full revamp of ARBK’s mobile app in 2024, the overseas branch continued to enhance the app’s usability and features during 2025 to further improve user experience. Key among the new features was the ‘Easy Pay Service’, allowing ARBK customers accessibility to the national instant payment service through the mobile app. This feature allows users to send and receive money to and from local banks through KNET, Kuwait’s national payment network. Telecom payment services were also introduced via mobile app. Push notifications were enabled to notify users on a range of actions, from transaction and security alerts to payment reminders and promotional offers from the bank.

Several digital updates have been in development at ARBK during the year in review with the aim of providing customers with a superior digital banking experience. The overseas branch focused efforts on enhancing customer experiences through personalisation by integrating the Customer Relationship Management (CRM) system with a customer 360-degree view. This would enable ARBK to consolidate all customer data into a central, accessible location, gain actionable insights, make data-driven decisions, while allowing for highly targeted and relevant marketing campaigns with potential to increase sales. The branch also initiated the development of a digital onboarding process as well as KYC online updates feature for improved security and convenience, both functions in the final stages of development at the close of the year. Several mobile payment solutions including Apple Pay and virtual cards were also initiated in 2025, and will be developed over the next few months. The bank is also looking to unify a global design of its mobile application in the near future.

Strengthening local community and industry standing

The overseas branch continued to strengthen its standing in Kuwait as a sought-after employer, backed by a strong financial performance, competitive employee benefits, commitment to digital innovation, and alrajhi bank’s reputation as a top talent acquisition employer globally. ARBK’s HR department remained committed to the professional growth of its employees, facilitating skill enhancement and leadership development through in-person training sessions, while continuing to sponsor employees pursuing relevant external certifications. An employee survey was conducted towards the end of the reporting period to gain deeper insight into employee sentiment, with ARBK aiming to leverage survey findings to improve employee engagement, retention, and overall performance. ARBK’s HR Policy underwent several significant amendments during the year in review to reflect new labour regulations and workplace practices introduced by the Kuwait government.

With plans to open a third branch within the Ahmadi Governorate, ARBK remained strongly committed to Kuwaitisation targets in 2025, achieving an overall ratio of 70.3%. The overseas branch also maintained regulatory requirements to achieve the Kuwaitisation ratio across the upper/middle and lower management.

In 2025, ARBK sponsored the AAOIFI Conference, with participation from its Shariah and Audit teams, to strengthen its credibility in Islamic banking. The sponsorship enhanced brand visibility among industry leaders, and reinforced its commitment to shariah-compliant standards. This sponsorship positioned ARBK as an active contributor in key Islamic finance discussions in Kuwait.