The Banking The Banking Executive Magazine - June 2024 Issue

Kuwait KUWAIT BANKING SECTOR REACHES RECORD LIQUIDITY OF $208BLN At the end of the first quarter of this year, total deposits in the banking sector in Kuwait, including both Kuwaiti dinars and foreign currency, reached 63.9 billion dinars, reports Al-Jarida daily. This marks the high- est liquidity level observed in the sector, highlighting abundant sources of deposits with diverse terms rang- ing from one month to over three years. Demand deposits, which largely constitute cost-free liquidity, were approximately 13.2 billion dinars. The largest segment of deposits was in term deposits for one month (around 19.3 billion dinars). This fig- ure shows a decline from its peak in December 2023 when it stood at about 21.2 billion dinars. There was an increase in deposits from one month to three months, rising from 10.3 billion dinars to 11.4 billion di- nars, an increase of approximately 1 billion dinars. On the other hand, deposits for more than three months to six months de- creased from 6.8 billion dinars to 5.19 billion dinars by the end of the first quarter of 2024. A significant rise was noted in deposits for longer pe- riods, specifically from more than six months to nine months, increasing from 2.4 billion dinars in December to 3.3 billion dinars by March 2024, marking a substantial 37.5% in- crease. This reflects a trend towards longer-term deposits that typically offer favorable returns. Deposits for periods exceeding nine months to a year saw slight growth, from 3.2 bil- lion dinars to 3.4 billion dinars. Meanwhile, deposits for periods of more than one year to three years grew by 10%, from 3.2 billion dinars to 3.61 billion dinars. The slowest growth was seen in de- posits for periods exceeding three years, increasing by only 3% from 4.17 billion dinars to 4.3 billion di- nars. Overall, Kuwait’s banking sec- tor appears to be in a strong financial position with ample liquidity and a well-balanced distribution of de- posits across various time periods. This allows banks to comfortably meet both local and foreign compa- nies’ financing needs. The stability and sufficiency of deposits have con- tributed to a decline in the interbank market, which decreased by 18.4% from December 2023 to April 2024, refl ecting a healthy sectorwide sta- bility and surplus liquidity. the BANKING EXECUTIVE 36 ISSUE 186 JUNE 2024