The rising ratings are attributed to KFH's strong domestic franchise as the second largest bank in the country and the passage of the Islamic banking law in 2003, bringing KFH formally under the regulatory wing of the Central Bank of Kuwait.

KFH has been expanding its international operations, completing three transactions in Europe and South-East Asia recently. The most unusual transaction was as co-lead manager on Europe's first sukuk issue in August - a five-year, $100 million issue, arranged by Citigroupfor the German state of Saxony-Anhalt. KFH also committed $15 million to a $93 million, two-year murabaha facility for Petro Ofisi, Turkey's gasoline distributor. In Singapore, the bank committed $20 million to a one-year murabaha facility for a Singaporean trading company. The bank is also planning to launch a Malaysian subsidiary to join offshoots in Bahrain, Turkey and the UAE.