Kuwait - Mubasher: August saw a healthy gain in credit in Kuwait, with growth improving to 8.7% year-on-year, its best pace since mid-2009, according to a recent report by National Bank of Kuwait (NBK).
Credit rose by KWD 276 million, on a notable increase in household loans and business credit.
Meanwhile, private deposits saw another decline during the month, though an increase in government deposits helped offset some of that decrease. Domestic interest rates held steady throughout the month.
Growth in household lending was strong in August, adding a net of KWD 113 million. Growth slowed to 8.9% year-on-year, its slowest pace since late 2011. However, the gain was well above the monthly average increase of KWD 55 million recorded since November 2015.
Lending to nonbank financial companies saw a small net gain and maintained positive growth compared to a year before. Sector debt added KWD 4 million in August, with growth picking up to 4.4% year-on-year. The sector appears to have largely completed deleveraging that began in the wake of the 2008 financial crisis.
All remaining credit rose by KWD 160 million with growth improving to 8.9% year-on-year, the report indicated.
Private deposits were down in August on the heels of a large drop the month before.
Meanwhile, an increase in government deposits helped offset some of the decline in private deposits. The month saw a gain of KWD 94 million, with growth at 27% year-on-year.
Government deposits have grown notably over the last twelve months, adding KWD 1.7 billion, at a time when private sector deposits have been under pressure, the report highlighted.
Banking system liquidity decreased in August, but maintained a healthy level.
Bank reserves added KWD 186 million to KWD 5.6 billion or 9.3% of total bank assets.
Meanwhile, net domestic debt issuance was limited in August, with outstanding public debt instruments (PDIs) rising by a mere KWD 30 million to KWD 2.57 billion
Interest rates have been relatively steady. The 3-month Kuwait interbank offered rate (Kibor) added 6 basis points (bp) in August to reach 1.56%. Rates have been relatively steady since.
Meanwhile, customer deposit rates appeared to ease during August, declining by 1-2 bps for various maturities, the report concluded.
