Islamic financial services

Sharia-compliant banking represents a large and vibrant market segment in Kuwait, as Islamic banks exhibit a similar profitability trend to their conventional counterparts. Within Kuwait, Islamic banks hold 35% of total banking assets, and it has been estimated that they are growing at a rate of 20% per annum. On the other hand, the 2008 financial crisis brought the sharia-compliant segment slow or stagnant expansion and, in some cases, contraction. This has highlighted the need for a comprehensive regulatory structure to complement the legal framework and the implementation of a new layer of regulations. The government is poised to address this need with new sukuk (sharia-compliant bonds) and trust laws, designed to establish a robust governance framework for sukuk issuance. This chapter includes interviews with Mohammad S Al Omar, CEO, Kuwait Finance House; and Mohammed Jarrah Al Sabah, Chairman, Kuwait International Bank.