KUWAIT CITY, May 19: It seems that banks are gearing up for upcoming economic activities by bolstering their deposit balances and establishing connections with key clients and liquidity holders to attract more deposits or secure alternative funding sources, reports Al-Jarida daily. This proactive approach allows banks to secure liquidity ahead of increased demand, potentially at favorable interest rates, as prices tend to rise when demand intensifies, akin to other markets. Anticipation is building for a surge in economic and commercial activity, with several projects expected to be launched soon and significant advancements anticipated in the appointment procedures for numerous citizens in various government agencies.

Additionally, the reintroduction of listings for some large companies, along with private offerings, including those financed by banks, is expected to require substantial liquidity. Private sector deposits represent the primary source of bank financing, accounting for 43.6% of total deposits. Government and public institutions’ deposits make up 13.7%, while individuals contribute the remaining 42.7%, with a significant portion coming from individuals with high solvency and liquidity. Banking sector data indicates a decrease in deposit rates with foreign banks, suggesting a shift in deposit behavior.

Despite this, the banking sector exhibits strength, resilience, and growth, instilling confidence in its ability to support the anticipated development surge. Local banks’ total assets increased by 2.6% to reach 87.63 billion dinars by the end of March. The private sector accounts for 52% of total assets, with foreign assets comprising 28.8%. Foreign assets saw growth across various categories, including credit facilities to companies and non-resident parties, foreign investments, loans to foreign banks, and other assets. Digitally, the banking sector’s net foreign assets grew by 35.1% to reach 13.68% of total assets by the end of the first quarter of 2024, reflecting increased international transactions. Notably, credit facilities to the business sector, primarily in cash, amounted to about 60.9% of total credit facilities, totaling approximately 29.29 billion dinars by the end of the first quarter of 2024.