The country’s dominant bank sees future growth coming from the small-business market and from regional customers.

Author: Gordon Platt
Al Fulaij, NBK-Kuwait: “Our culture is built on relationship banking.”

An oil-price drop can affect banks in two ways, according to Salah Al Fulaij, CEO of NBKKuwait. One is by tightening liquidity in the financial system, as the government has fewer revenues to deposit. The other is by causing the government to cut back on spending. “However, in this instance, we expect the government to stick to its spending plans,” Al Fulaij says. “Since the decline in oil prices, the government has declared several times its intent to move forward with its development plan. We have seen large projects being awarded, one after theother. The country needs the infrastructure, and the ability of the government to finance projects is not in question, thanks to massive reserves.”

Contractors and subcontractors will require bank credit—along with ancillary financial services—to underwrite their activities. “We anticipate the pace of credit growth to pick up to around 7% in 2016 and 8% in 2017,” says Al Fulaij. Meanwhile, he adds, systemic liquidity remains healthy, and the authorities stand ready to address an issues that might arise.

NBK expects Kuwait’s non-oil real GDP growth to improve in the next two years to the 4%-to-5% range. To fuel the economy in the longer term, the government is seeking to encourage a more entrepreneurial business culture by nurturing small and medium-size enterprises with several legislative and regulatory initiatives. “While the SME sector in Kuwait remains quite undeveloped, fortunately we are seeing this change in recent months at a rapid pace,” Al Fulaij says. “The government has shifted focus to this growing sector.”

His bank is doing its part. One NBK offering for start-ups is MyStore2Go. com, an e-commerce portal of Nexxus Payment Group that helps businesses grow online. The bank has also trained a team of experts to advise and support young entrepreneurs. “We want to ensure that our SME customers have access to affordable fi nance and that we are providing the right support to help their businesses grow,” Al Fulaij says.

Founded in 1952, NBK was Kuwait’s first indigenous bank and the first joint stock company in the Gulf. As a result, says Al Fulaij, it has long held a leadership position in the Kuwaiti market across all its business segments. “Our culture is built on relationship banking,” he says. “We know our customers and understand their banking needs, which allows us to serve them better.” In Global Finance’s annual list of the world’s safest banks, NBK has ranked in the top 50 for the past 10 years.

Regionally, NBK’s strategy remains focused on the Gulf Cooperation Council markets, which enjoy relatively strong economic fundamentals and political stability. Egypt is also an important market for the bank, owing to the country’s large population and growth potential. NBK-Egypt reported a 63% increase in earnings for the first nine months of 2015, compared with the same period a year earlier, and a 61% growth in assets


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