KCC officially designates NBK as Kuwait's main settlement bank

08/05/2025 01:30 AST

In a significant milestone that reinforces the Bank's leadership and instrumental role in advancing Kuwait's financial infrastructure and supporting Vision 2035, Kuwait Clearing Company (KCC) has officially designated National Bank of Kuwait (NBK) as the country's main settlement bank.

The announcement follows a meticulous multi-year evaluation process initiated in 2020, during which participating banks underwent rigorous testing over a span of two years. KCC prioritized institutions with superior operational capabilities, ultimately awarding NBK the highest rating among all contenders. The selection of NBK stands as a testament to the bank's substantial investments in infrastructure and systems, enabling it to fully meet KCC's comprehensive technical and operational requirements. Its proactive approach and high level of operational readiness have firmly established NBK as a trusted partner in advancing this strategic national initiative.

NBK played a pivotal role throughout the various stages of testing, supporting six out of ten brokerage firms and enabling them to meet key operational and compliance standards with confidence and efficiency.

This ambitious project which will come into effect on June 29thdemanded daily coordination and ongoing communication to meet critical deadlines, underscoring the strong collaboration between NBK, KCC, and market participants. In addition, NBK and KCC jointly conducted technical support sessions to guide participants through the testing process, ensuring seamless integration and full system readiness.

NBK has signed a strategic Memorandum of Understanding with KCC, aimed at developing the banking services provided in collaboration with the Company. The agreement seeks to strengthen joint efforts to advance electronic services, accelerating the execution of operations, minimizing associated risks, and automating the necessary processes for each party to seamlessly access and deliver services to the other.

Commenting on the occasion, Mohammad Al-Kharafi, Group Chief Operating Officer, Group Operations, Technology and Data stated: "We are proud to contribute to the implementation of this national initiative in alignment with Kuwait Vision 2035. This milestone reflects NBK's unwavering commitment to playing a pivotal role in shaping Kuwait's economic future leveraging our expertise to drive greater efficiency, resilience, and growth across the capital markets."

He pointed out that the Bank's proactive approach, operational readiness, and substantial investments in developing its digital infrastructure over the past years have all contributed to cementing its position as an ideal partner in supporting this national initiative. Furthermore, Al-Kharafi added that the Bank is proud of its strong partnership with KCC and of their joint work on strategic projects designed to deliver a qualitative leap in the performance of Boursa Kuwait. These efforts aim to elevate clearing and settlement operations to international standards-positively impacting the broader Kuwaiti economy.

Abdulla Al-Mutawa, Senior Vice President, Operations, commented:"We are pleased to witness the launch of the Central Counterparty Project (CCP), a fully integrated system that connects the bank, brokerage firms, KCC, the Central Bank of Kuwait, and investors-all securely anchored by a set of programmed rules within systems that are automatically monitored by regulatory authorities."

"The CCP's functions include the automated execution of KCC's operations for designated accounts, with real-time processing and no human intervention-streamlining workflows for all stakeholders, including investors, trading companies, custodians, and the accounting teams of all parties involved," he added. Al-Mutawa emphasized that launching the project marks a significant milestone in the development of Kuwait's clearing and settlement infrastructure, ushering in a new era of transparency, speed, and reliability in local stock market operations.

Highlighting the significance of this occasion, Fahad Al-Mukhaizim, Chairman of the Board of Directors of Kuwait Clearing Company (KCC), stated: "This step represents a cornerstone of KCC's strategy, aimed at fostering a more robust and sustainable financial infrastructure. Aligned with international best practices in clearing and settlement, KCC, in close collaboration with the Capital Markets Authority, has spearheaded the design and activation of this project. It underscores our unwavering commitment to playing a pivotal national role in enabling the market to transition into a more efficient, flexible, and resilient model.

The CCP system is not merely a technical upgrade; it marks a transformative shift in the relationship between market participants and the existing risk model. By reducing credit risk, it establishes a higher level of security and trust between the parties involved. At KCC, we firmly believe that the future of the market can only be built through effective partnerships, institutional integration, and the application of both institutional and technical intelligence. We continue on this path, striving to achieve the goals of Kuwait Vision 2035, with the ambition to position the Kuwaiti market as a regional financial hub."

The collaboration with NBK as the Main settlement bank for this project, significantly strengthens the reliability of cash transactions associated with the settlement process. Meanwhile, Duaij Al-Saleh, CEO of Kuwait Clearing Company, emphasized the project's significance, remarking: "CCP is a milestone in our journey, reflecting both our institutional and technical capabilities in leading major developmental projects effectively and responsibly. In recent years, we have invested significantly in enhancing our technical infrastructure and operational governance in preparation for this phase.

Thanks to our national workforce and strategic partnerships, we have successfully implemented this project in accordance with the highest international standards. Our goal is not just to stay abreast of global developments, but to actively shape them by offering advanced solutions that support liquidity, reduce risks, and strengthen the confidence of local and international investors.

We remain committed to expanding our post-trade services and building a more integrated infrastructure that fosters market growth and development. The partnership with NBK on this project goes beyond cash settlements, symbolizing the integration of roles between market infrastructure and the banks operating within the system-ensuring the seamless alignment necessary for a developed market environment."

Through its strategic vision, KCC affirms its unwavering commitment to strengthening its position as a leading provider of financial infrastructure in Kuwait. By embracing cutting-edge technologies, developing innovative products and services that meet the evolving needs of the market, and upholding the highest standards of transparency and governance, the company seeks to enhance the market's appeal and serve the interests of all its stakeholders.

NBK remains committed to advancing its digital and technological capabilities across its global footprint, leveraging a broad network of local and international branches spanning 13 countries across four continents. These include key financial hubs such as London, New York, Paris, Geneva, Singapore, and Shanghai, alongside a strong regional presence in Bahrain, Egypt, Iraq, Lebanon, Saudi Arabia, and the United Arab Emirates.

Kuwait Times