Kuwait’s banking sector is witnessing intensified competition over premium customers, with medium-sized and smaller banks challenging lenders that have recently introduced loans at interest rates of around 4 percent, roughly 2.5 percentage points below the maximum rate allowed for financing entities.

The move by two banks to offer financing at around 4 percent has prompted other lenders to join the competition, raising the possibility of further rate reductions if the race to attract customers continues. However, the competition is largely focused on a specific segment of the market.

Banks are targeting Kuwaiti customers with stable employment and relatively high salaries, while residents and stateless persons are excluded from the preferential status being offered under these programs. Although eligibility criteria vary between banks, the targeted segment generally consists of customers with stable jobs and salaries, preferably starting at around 1,500 dinars a month.

The group includes high-net-worth individuals with significant deposits and investments, as well as doctors, judges, senior officers, engineers, technicians, artificial intelligence professionals, oil-sector employees and teachers. The emerging competition goes beyond the immediate cost of financing.

Banks are seeking to strengthen relationships with high-value customers, retain substantial deposits and protect liquidity levels by keeping major balances within the banking system. The preferential packages also extend beyond cheaper loans. Customers in this segment may receive exemptions or discounts on selected banking fees and charges, as well as access to services and benefits designed specifically for premium clients.

For banks, expanding credit offerings to premium customers is also viewed as a way to support future loan-book growth, particularly in housing finance, while increasing fee and commission income from banking, investment and financing services used by high-net-worth customers. The incentives therefore serve several objectives, including supporting credit growth, securing stable sources of financing, attracting new deposits and increasing the volume of transactions generated by premium customers.

Most banks offer broadly similar benefits to this segment. These include dedicated relationship managers, priority services at branches and call centers, preferential returns on some savings products, discounts or exemptions on banking fees, and credit and financing cards with higher limits and additional benefits.
Some premium banking programs also extend into investment services, concierge facilities, travel benefits and airport lounge access, making the competition for affluent customers broader than interest rates alone.