KUWAIT CITY, Aug 29: Kuwaiti banks have consistently set new records for their net profit margins, achieving their highest historical level by the close of the second quarter this year, reaching 44.3 percent. This marked an increase from 41.5 percent at the close of the first quarter, 40.7 percent at the end of the previous year, and 39.2 percent at the conclusion of the second quarter, reports Al-Rai daily. The Central Bank of Kuwait’s financial safety indicators for the second quarter of 2023 reveal that the rate of non-performing loans in Kuwaiti banks reached 1.6 percent of the total loan portfolio by the close of the second quarter. This reflects a 0.1 percent increase from both the first quarter of the year and the second quarter of the preceding year, both of which were at 1.5 percent.

This also signifies a 0.2 percent rise from its level at the end of 2022, which stood at 1.4 percent. The regular loan coverage ratio in the banking sector declined to 276.9 percent at the end of June, a decrease from 301.9 percent in March, 308.5 percent at the end of the prior year, and 302.5 percent at the conclusion of the first half of 2022. Kuwaiti banks’ capital adequacy ratio, as per “Basel 3” standards, reached 18.4 percent, compared to 19 percent at the close of the first quarter this year and 19.2 percent at the end of December 2022. This performance remains steady compared to the end of the second quarter of the previous year, which was also 18.4 percent.

The ratio of the first tranche of capital to the capital base in the banking sector slightly dropped to 88.3 percent by the close of the second quarter of 2023. This is a slight decrease from 88.6 percent at the end of the first quarter and 88.8 percent at the close of the previous year. However, it experienced an increase from its level at the end of the first quarter of the preceding year, which was 88.1 percent. The ratio of shareholders’ equity to total assets of Kuwaiti banks increased to 13.6 percent by the close of the second quarter this year. This is up from 13.2 percent at the end of the first quarter, 13.4 percent at the conclusion of December 2022, and 11.6 percent in the second quarter of the prior year.

The regulatory liquidity ratio in the banking sector was recorded at 22.8 percent by the end of the second quarter of 2023. This is lower than its level at the close of the first quarter (24.7 percent) and the second quarter of 2022 (25 percent). However, it did see an increase from its level at the conclusion of the previous year, which was 21.4 percent. Banks’ net interest margin increased to 2.7 percent by the end of June, up from 2.6 percent at the end of the first quarter and also at the end of December. This also marked an improvement from 2.4 percent at the conclusion of the second quarter of 2022.