Financial & Professional Opportunities

An Expert's View about Banking, Finance and Insurance in Kuwait

Last updated: 21 Aug 2011

The Kuwaiti Financial system is sizeable and well developed. Kuwait is trying to position itself as the entrance gate for investment.

Sector briefing Financial & Professional Services Opportunities in Kuwait Why Kuwait? The Kuwaiti Financial system is sizeable and well developed. Kuwait is trying to position itself as the entrance gate for investment. Besides commercial and specialised banks at the core of the system, it includes a growing number of financial companies and investment funds, as well as insurance companies and an active stock exchange Although the establishment of new banks domestically is restricted, there is adequate competition in financial markets. The insurance sector is growing quickly and in particular with regard to Islamic compliant insurance products. Domestic Institutions offer a wide ?Kuwait is trying to position range of up-to-date services. itself as the entrance gate for Find general information on the Kuwait?s investment.? market conditions on UKTI?s website. The Business Opportunities gathered by our Embassy gives an overview of Kuwait?s economy, business culture, potential opportunities and an introduction to other relevant issue. UK Trade & Investment Sector briefing: Financial & Professional Services opportunities in Kuwait May 2011 a MOU on Trade and Technical Co- Opportunities operation which covers the area of provision of Opportunities for UK Financial and Legal advisory and consultancy services allied to companies in Kuwait are growing ? key areas Kuwait?s rolling cycle of 5 year development are detailed below: programmes. Insurance Capital Markets The insurance sctor in Kuwait is small but in Having recently published its executive bylaws, line with other Gulf States, but is significantly Kuwait?s first independent stock market lower than the 3.4 percent of GDP for emerging regulator, the Capital Markets Authority is now markets and 9.0 percent for advanced ready to begin process. The Kuwaiti parliament economies passed legislation in February 2010 that established the CMA as part of a larger This market is served by seven Kuwaiti regulatory framework for the country?s capital Insurance Companies ? including two insurers markets. The Capital Markets Law, as this operating on Islamic principles ? and ten legislation is generally known, calls for the CMA foreign insurance branches from Arab and to regulate the Kuwait Stock Exchange(KSE), western countries. supervise public and private subscriptions and oversee mergers and acquisitions Non-life insurance products account for about 75 percent of the market; life insurance Aside from listed firms, perhaps the institutions products (life and health insurance) account for that will be most affected by the CML are the the remainder. The four largest national investment companies, which are involved in a companies are highly capitalised and profitable variety of activities, including direct and and earn most of their income from indirect investment in various sectors, asset investments and reinsurance commissions, management and financial advisory services. rather than from underwriting for their own account The CML also establishes a supervisory framework for mergers and acquisitions, with a Public Private Partnerships (PPP) particular focus on protecting minority shareholders during the acquisition process. The global economic slowdown, limited liability and relative scarcity of credit have led many Perhaps more significantly, the CML bylaws regional governments to consider PPP as a also require that anyone who buys more than serious means of financing public sector 30% of voting shares in a Kuwaiti listed firm projects. Kuwait announced in Febraury 2010 a must make the same offer to all shareholders £90 billion 4 year (since increased to £100 Bn within 30 days. over 5 years) package for infrastructure development. Additionally the oil sector is set However, despite uncertainties implementing to see a further £60 billion investment the CML will likely increase transparency and programme including a new 615000 bpd oil improve the overall functioning of Kuwait?s refinery and increased oil production capacity capital markets raised to 4 million barrells per day. Islamic Finance In its strategy to promoteand support increased private-sector participation in Islamic Finance in Kuwait dates back to 1977 infrastructure development, the Government of when the first Islamic bank, the Kuwait Finance Kuwait has established a Public Private House, was established. Islamic finance Partnership programme providing significant institutions in Kuwait now consist of two investment and financing opportunities for the Islamic banks and 31 Islamic investment private sector. Kuwait has also passed new companies with a combined market share of legislation including a privatisation law, capital more than 26% of the domestic banking and markets and labour law to help country?s small financial sector. They also manage an private sector to attract foreign investment. additional 11% of total off-balance sheet accounts in that sector. A conventional ban will To facilitate the activities of UK businesses in soon convert to an Islamic bank. the PPP programme, UK Government signed in UK Trade & Investment Sector briefing: Financial & Professional Services opportunities in Kuwait The Central Bank Of Kuwait (CBK) encourages consolidation by local and cross border mergers and acquisitions, which also reinforces integration on domestic and regional levels as they have a view that the market may have become saturated. CBK has formally developed its supervisory framework concerning Islamic Banking in Kuwait in conformity with international best practices and standards for conventional finance, with adaptations to suit the Islamic Finance business. UK Trade & Investment Sector briefing: Financial & Professional Services opportunities in Kuwait New export events are added daily to the site UKTI contacts and you can register to be alerted to them on a daily, weekly or monthly basis Duncan Hoyland Head Of Trade & Investment UKTI?s Tradeshow Access Programme (TAP) British Embassy Kuwait provides grant support for eligible Small & Tel: 00965 2259 4362 Medium Sized Enterprises (SME's) to attend Email: Duncan.Hoyland@fco.gov.uk trade shows overseas. Find out more about www.ukti.gov.uk UKTI support for attendance at overseas events Irene Ronald Senior Commercial Officer British Embassy Kuwait Tel: 00965 2259 4362 Email: Irene.ronald@fco.gov.uk www.ukti.gov.uk UK Trade & Investment Sector briefing: Financial & Professional Services opportunities in Kuwait Next steps - ? Arranging appointments How UKTI can help ? Organise seminars or other events for you to meet contacts and promote your British companies wishing to develop their company in the Kuwait market business in the Kuwait market are advised to undertake as much market research and This work is available via our Overseas Market planning as possible in the UK. UKTI?s team in Introduction Service (OMIS) a chargeable Kuwait, with its wide local knowledge and service which assists British-based companies experience, can provide a range of services to wishing to enter or expand their business in British-based companies wishing to grow their overseas markets. business in global markets. To find out more about commissioning this This can include: work, or accessing other UKTI services and ? Provision of market information specialist advice, please visit the UKTI website ? Validated lists of agents/distributors to find contact details for your local UKTI ? Key market players or potential office. customers in the Kuwait market ? Establishment of interest of such contacts in working with you Whereas every effort has been made to ensure that the information given in this document is accurate, neither UK Trade & Investment nor its parent Departments (the Department for Business, Innovation & Skills, and the Foreign & Commonwealth Office), accept liability for any errors, omissions or misleading statements, and no warranty is given or responsibility accepted as to the standing of any individual, firm, company or other organisation mentioned. Published 2011 by UK Trade & Investment. Crown Copyright © Published 2011 by UK Trade & Investment. ©Crown Copyright 2011 You may reuse this information (not including logos, images and case studies) free of charge in any format or medium, under the terms of the Open Government Licence. To view this licence, visit www.nationalarchives.gov.uk/doc/open-government-licence/ or write to the Information Policy Team, The National Archives, Kew, London TW9 4DU, or email: psi@nationalarchives.gsi.gov.uk This publication is also available from our website at www.ukti.gov.uk or for more information please telephone +44 (0)20 7215 8000. UK Trade & Investment Sector briefing: Financial & Professional Services opportunities in Kuwait
Posted: 21 August 2011, last updated 21 August 2011

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