The Banking Executive Magazine - April 2022 Issue

Kuwaiti Banks’ Credit 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 bil- lion at the end of last January, and compared to their levels in February of 2021. The volume of deposits increased an- nually 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 de- posits 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by 4.1% compared to its levels in February of last year, which was KD 7.47 billion, that means the government has withdrawn KD 307 million from its balances within a year.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, de- posits in Kuwaiti dinars increased by 0.69% per month during the month of February to reach KD 35.726 bil- lion 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, reach- ing 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 in- creased by 4.73% to reach the level of KD 2.568 billion at the end of Feb- ruary. 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 per- cent 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 quar- ter of this year, while “Hermes” esti- mates that loan growth will be 10%, with a cost of risk of 84 basis points during the period. The same com- pared 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 re- sult of a 5 percent decline in total revenue on a quarterly basis, in ad- dition to a slight increase in provi- sioning costs on a quarterly basis. ISSUE 160 APRIL 2022 the BANKING EXECUTIVE 29