Many Kuwait banks did not benefit from CBK’s stimulus package

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KUWAIT CITY, Nov 26: The majority of Kuwaiti banks “did not benefit from the stimulus package launched by the Central Bank of Kuwait to face the potential challenges from the repercussions of the Coronavirus and they relied on providing the necessary liquidity levels on their instruments, which did not expose them to any unpredictable risks- despite the stressful circumstances, rendering the banks capable of distributing the profits for 2020, reports Al-Rai daily.
Sources suggested that “the National Bank and Kuwait Finance House did not completely use the stimulus package, which makes them the most capable of moving in this direction, supported by their conformity with the Third Basel Accord, which approve the distribution of profits in the event that the perks of reducing liquidity ratios are not used.”

The distribution of profits depends on taking supervisory approvals and on the approval of the General Assembly.

As for the rest of the local banks, the sources reported that “some of them used the perks of easing the liquidity ratios launched by the Central Bank, but on a very small scale, and reconciled their positions quickly after a few days of using these ratios, making sure that the cost will not be distributed as profits. It is likely that a bank or two used these perks for a longer period before they recovered and covered the percentage used.

The same sources pointed out that the banks have replaced the decided regulation along with other tools that supported their need for liquidity on the basis that its budget will not been affected by the perks due to weak usage and quick return to traditional ratios.

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