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Kuwait Finance House Considering Expansion in Saudi Arabia

The Saudi flag
The Saudi flag
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Kuwait Finance House Considering Expansion in Saudi Arabia

The Saudi flag
The Saudi flag

Kuwait Finance House (KFH), the Gulf country's largest lender, is looking at opportunities to expand in Saudi Arabia, it said in a bourse filing on Tuesday, following a report that it was considering taking a stake in peer Saudi Investment Bank.

Trading in the company's shares, which were suspended before the market open, resumed after KFH issued a statement in response to the report.

KFH said it was conducting studies on the potential expansion and that these were in line with the bank strategy envisioning potential investments in the region, including in Saudi Arabia.

“Regarding the news published by Bloomberg, KFH confirms that it is still studying the available opportunities in more than one bank, and no memorandum of understanding or any agreement has been signed with any bank in the Kingdom of Saudi Arabia,” the lender said.

Amid news of the potential deal, shares of Saudi Investment Bank (SAIB) jumped as much as 4% in Riyadh trading Tuesday.

On Tadawul, the shares of SAIB, the second smallest listed bank in the Saudi financial market in terms of assets and capital following Bank AlJazira, ranged between 13.26 Riyals and 12.78 Riyals, closing on the latest figure.

Meanwhile, the share of KFH Bank, which is the largest in Kuwait in terms of assets and capital, rose by less than 0.50% at 0.717 Kuwaiti dinars.

The Kuwaiti government and the Public Authority for Minors Affairs own 31.5% of KFH’s shares. Vanguard Group owns 2.45% of the Bank’s shares and BlackRock owns 1.75%.

As for the Saudi Investment Bank, it is owned by the General Organization for Social Insurance - Saudi Arabia (25.6%), Yasser Mohammed Al Jarallah (4.6%), Vanguard Group (2%) and BlackRock (1.2%).

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Federal Reserve Cuts Key Interest Rate by a Quarter-point

US Federal Reserve Chair Jerome Powell attends a press conference following a two-day meeting of the Federal Open Market Committee on interest rate policy in Washington, US, November 7, 2024. REUTERS/Annabelle Gordon
US Federal Reserve Chair Jerome Powell attends a press conference following a two-day meeting of the Federal Open Market Committee on interest rate policy in Washington, US, November 7, 2024. REUTERS/Annabelle Gordon
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Federal Reserve Cuts Key Interest Rate by a Quarter-point

US Federal Reserve Chair Jerome Powell attends a press conference following a two-day meeting of the Federal Open Market Committee on interest rate policy in Washington, US, November 7, 2024. REUTERS/Annabelle Gordon
US Federal Reserve Chair Jerome Powell attends a press conference following a two-day meeting of the Federal Open Market Committee on interest rate policy in Washington, US, November 7, 2024. REUTERS/Annabelle Gordon

The Federal Reserve cut its key interest rate Thursday by a quarter-point in response to the steady decline in the once-high inflation that had angered Americans and helped drive Donald Trump’s presidential election victory this week.
The rate cut follows a larger half-point reduction in September, and it reflects the Fed’s renewed focus on supporting the job market as well as fighting inflation, which now barely exceeds the central bank’s 2% target, The Associated Press reported.
Asked at a news conference how Trump's election might affect the Fed's policymaking, Chair Jerome Powell said that "in the near term, the election will have no effects on our (interest rate) decisions.”
But Trump’s election, beyond its economic consequences, has raised the specter of meddling by the White House in the Fed’s policy decisions. Trump has argued that as president, he should have a voice in the central bank’s interest rate decisions. The Fed has long guarded its role as an independent agency able to make difficult decisions about borrowing rates, free from political interference. Yet in his previous term in the White House, Trump publicly attacked Powell after the Fed raised rates to fight inflation, and he may do so again.
Asked whether he would resign if Trump asked him to, Powell, who will have a year left in his second four-year term as Fed chair when Trump takes office, replied simply, “No.”
And Powell said that in his view, Trump could not fire or demote him: It would “not be permitted under the law,” he said.
Thursday’s Fed rate cut reduced its benchmark rate to about 4.6%, down from a four-decade high of 5.3%. The Fed had kept its rate that high for more than a year to fight the worst inflation streak in four decades. Annual inflation has since fallen from a 9.1% peak in mid-2022 to a 3 1/2-year low of 2.4% in September.
When its latest policy meeting ended Thursday, the Fed issued a statement noting that the "unemployment rate has moved up but remains low,” and while inflation has fallen closer to the 2% target level, it “remains somewhat elevated.”
After their rate cut in September — their first such move in more than four years — the policymakers had projected that they would make further quarter-point cuts in November and December and four more next year. But with the economy now mostly solid and Wall Street anticipating faster growth, larger budget deficits and higher inflation under a Trump presidency, further rate cuts may have become less likely. Rate cuts by the Fed typically lead over time to lower borrowing costs for consumers and businesses.
Powell declined to be pinned down Thursday on whether the Fed would proceed with an additional quarter-point rate cut in December or the four rate cuts its policymakers penciled in for 2025.