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KUWAIT CITY, Feb 14: According to reliable banking sources, local banks have recently increased their activity in concluding joint loan deals directed towards neighboring markets, driven by fears of the continued slowdown in offering development projects locally, and thus not achieving the targeted growth rates that could maintain their market shares, reports Al-Rai daily. They explained that Kuwaiti banks have recently adopted a strategy that transferred part of their battle for growth with their loans abroad, as they raised the rates of financing liquidity that they pumped into joint loans directed to foreign markets, led by Saudi Arabia, and other markets open to developmental expansion.
The contribution came in various shares, including government projects directly, and projects of companies from the private sector. The low risks enjoyed by syndicated loans, especially in light of the presence of huge banks capable of managing them, encouraged a large number of local banks to compete strongly to seize shares of the loans that were marketed during the last period.
The syndicated loan market directed to foreign markets, specifically those that announced clear growth plans for their projects, has become a more attractive destination for local banks, especially those that are unable to compete locally, as well as those that have high levels of liquidity surpluses ready for lending, amid a narrow space for growth in the local market. The local banking’s move in this direction comes as part of the plans to increase the size of its credit leverage with less risky lending lines, with which an appropriate part of its accumulated liquidity surpluses can be absorbed.