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Thursday , August 11 2022

Kuwaiti banks’ credit growth hits record levels in February

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GOVT CUTS BANK DEPOSITS TO KD 7.17BN

KUWAIT CITY, April 14: Credit at Kuwaiti banks witnessed a monthly increase during February, reaching its highest level in history, recording a level of KD 43.162 billion, an increase of 1.04%, equivalent to KD 448 million, compared to last January, in which credit was at a level of KD 42.714 billion, while credit increased annually by 7.87 %, with a value of KD 3.152 billion, compared to its levels in February 2021, during which the level of KD 40 billion was recorded, according to the data of the Central Bank of Kuwait for the month of February 2022, reports Al- Anba daily.

The Central Bank’s data shows consumer loans directed towards the purchase of durable goods and cars witnessed a slight monthly decline by 0.01% or KD 300,000 during during February, to reach KD 1.837 billion, compared to KD 1.838 billion last January, while recording a significant annual growth of 14.03% compared to February levels of last year, amounting to KD 1.611 billion. While the installment loans granted to Kuwaitis for renovating or purchasing private housing increased by more than 0.68% during February to reach KD 14.6 billion, compared to KD 14.5 billion last January. It also recorded a strong annual growth of 13.5% compared to the levels of February last year of KD 12.864 billion. Loans directed towards the purchase of securities also increased, with a monthly increase of 5.1%, to record a level of KD 2.910 billion during during February, compared to KD 2.769 billion last January.

It also recorded an annual increase of 15.43% compared to its levels in February of last year, which amounted to KD 2.521 billion. The oil and gas sector also witnessed a monthly increase of 0.86% to record the level of KD 2,220 billion during during February, compared to KD 2.201 billion last January, and it recorded an annual increase of 15.8% compared to the levels of February of 2021, which was KD 1.917 billion. On the level of deposits, the Central Bank data showed that the deposits of the banking sector rose by 0.38% to reach KD 45.46 billion during February, compared to KD 45.29 billion at the end of last January, and compared to their levels in February of 2021.

The volume of deposits increased annually by 2.74 %, an increase of KD 1.213 billion, compared to the level of KD 44.251 billion in February of last year. The government reduced its deposits during February by KD 187 million, bringing the total government deposits in the banking system to KD 7.17 billion, a monthly decline of 2.54%, compared to 7.357 at the end of last January, and annually it decreased by 4.1% compared to its levels in February of last year, which was KD 7.47 billion, that means the government has withdrawn KD 307 million from its balances within a year.

At the level of the private sector, deposits in Kuwaiti dinars increased by 0.69% per month during the month of February to reach KD 35.726 billion at the end of the month after the private sector pumped 246 million KD of its deposits in Kuwaiti KD, and deposits of the private sector in Kuwaiti dinars rose annually, reaching KD 1.017 billion from February levels from last year, it amounted to KD 34.709 billion, or 2.93%. During February, the private sector deposits in foreign currencies increased by 4.73% to reach the level of KD 2.568 billion at the end of February. Also, the private sector deposits in foreign currencies increased on an annual basis during during February by 24.3%, an increase of KD 603 million compared to the levels of February last year, which amounted to KD 2,065 billion . In its latest report, EFG-Hermes Group expects the Kuwaiti banks to achieve the highest growth in profits on an annual basis at the level of Gulf banks during the first quarter of 2022, reports Al-Rai daily.

According to its estimates for the first quarter, the profit growth of Kuwaiti banks will reach 33 percent on an annual basis, compared to 21 percent for UAE banks, 15 percent for Saudi banks, and 21 percent for Qatari banks. “Hermes” stated that Kuwaiti banks’ allocations decreased in the second half of 2021 compared to the first half of the same year, and credit quality improved, which bodes well for the cost of risks in 2022, while banking sources said the consumer spending continues to drive the strong growth of individual loans, although its pace began to slow from 2021. As for revenue growth, the report expected that Kuwaiti banks would reach 5% on an annual basis during the first quarter of this year, while “Hermes” estimates that loan growth will be 10%, with a cost of risk of 84 basis points during the period. The same compared to 131 basis points in the first quarter of 2021. On a quarterly basis, Hermes estimates that gross profit will decline 10 percent, as a result of a 5 percent decline in total revenue on a quarterly basis, in addition to a slight increase in provisioning costs on a quarterly basis.

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