Kuwait inflation to keep on falling: c.bank chief Banks do well

KUWAIT CITY, Dec 29, (Agencies): Kuwaiti inflation will slow to 4.3 percent this year and 4.1 percent next year from 4.8 percent in 2011, central bank governor Mohammed al-Hashel predicted on Saturday in comments carried by state news agency KUNA.

Inflation in Kuwait has been slowing gradually since mid-2011, mostly due to lower food prices. Consumer prices rose 2.3 percent from a year earlier in November.

Non-performing loans at Kuwaiti banks amounted to around 6.8 percent of total credit portfolios in the first nine months of this year, Hashel said, adding that the banks had set aside provisions totaling 82.2 percent of the NPLs.

Kuwaiti banks took heavy provisions earlier this year, eating into first-half profits, as political conflict between the cabinet and parliament threatened to undermine the economy.

In early October, Hashel announced a 50 basis point cut in interest rates as part of the central bank’s efforts to kickstart bank lending.

In his comments on Saturday, he said the cut, the first since 2010, would not have negative consequences for Kuwait’s currency, the dinar.

Governor of the Central Bank of Kuwait (CBK) Dr. Mohammad Youssef Al-Hashel said Saturday the local banks made relatively good results in the first 9 months of 2012 given “the current conditions.” “The ratio of irregular debts to the total credit facilitating portfolio stood at 6.8 percent by September 30,” Al-Hashel said in an exclusive interview to KUNA.

“The ratio of specific and general provisions to the total irregular debts of the banks amounted to 82.2 percent by that time,” he noted.

The decision to cut the interest rate by 50 basis points in October, was in keeping1 with the current conditions of the local market and aimed to improve the performance of non-oil sectors of the economy.
The GDP amounted to 29.2 percent in 2011 compared with the previous year, he noted.

“The decision to bring down the interest rate has had a good impact on the reality of the fiscal market, the growth of crediting, the exchange rate of the Kuwaiti dinar, and the confidence in the national economy,” Al-Hashel affirmed.

“It was part of a range of fiscal measures by the CBK aiming to revitalize the economic growth, reduce the cost of intra-bank crediting and strengthen the financial positions of the banking sector,” he added
The signs of improvement are seen in the growth of the local bank crediting by 5.1 percent between December 2011 and November 2012, the CBK governor argued.

Regarding the net profits of the local banks in the first nine months of 2012, he said they stood at KD 437.8 million, down by 3.3 percent or KD 14.8 million from the figure of the corresponding period of 2011.
The decline of the profits resulted mainly from the decline of the value of the assets of some banks which necessitated increasing the banks’ provisions to face exposure of their clients to risks.

“Nevertheless, the results are generally good under the current challenging conditions,” Dr Al-Hashel noted.

The protective monetary policy of the CBK gains additional significance due to the fact that the promising crediting opportunities on the local market are at low ebb, he added.




  



 

Read By: 3202
Comments: 0
Rated:

Comments
You must login to add comments ...
 Existing Member Login      
Username
(Your Email Address)
Password
 
 
   Not a member yet ?
   Forgot Password ?

About Us   |   RSS   |   Contact Us   |   Feedback   |   Advertise With Us