Global Arab Network | National Bank of Kuwait: Crediting activity in Kuwait revives in Q2 of 2010

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National Bank of Kuwait: Crediting activity in Kuwait revives in Q2 of 2010

Global Arab Network - - Mohammed Almasri

Monday, 12 July 2010 20:34

National Bank of Kuwait: Crediting activity in Kuwait revives in Q2 of 2010

KUWAIT - The crediting activity in Kuwait grew in the second quarter of 2010 compared with the first quarter while the loaning growth kept a slow pace on an annual basis, according to the report issued by the National Bank of Kuwait (NBK).

In its monthly economic brief for May, the NBK said a sustainable growth in loaning relied heavily on the government spending and the speed of putting up for tender the major projects envisaged in the country's five-year development plan.

Despite the retreat of foreign deposits, the liquidity of the local banks kept growing, reflecting positively in turn on the foreign assets thanks to the efforts made by the Central Bank of Kuwait (CBK) to absorb the cash surplus.

The CBK accepted more long-term deposits from the local banks, the report pointed out.

The disposal of funds in its broader concept went down KD 77 million or by 0.3 percent in May from the previous month, yet it reflected a 0.3 percent increase on an annual basis.

The value of loans given to residents in May rose by KD 59 million or 0.2 percent compared with the figures of April while the annual growth rate was still slow and stood at 4.4 percent by the end of May.

The real property sector accounting for the rise in the volume of loans in May, representing KD 69 million, followed by the industrial sector, KD 28 million, and then the personal facilities KD nine million.

The personal crediting facilities channeled to stock purchase dropped by KD 15 million in May while those channeled to other purposes featured slighter retreat from the previous month rates.

The deposits of residents employed in the private sector went down by KD 77 million or 0.3 percent in the period in question due to the decline of foreign currency deposits.

The foreign currency deposits slid by KD 104 million in May losing up to KD 1.1 billion or one third of their value of in the previous 12 months, the report noted.

As for the interest rate, the NBK said the rate kept wavering with the interest rate on KD deposits from the private sector remaining unchanged at a monthly average of 1.08 percent in May, a quarterly average of 1.27 percent and a semi-annual 1.5 percent.

The slow growth of loan value, the rise of government deposits, and the capitalization moves of local banks such as Burgan and Al-Ahli, the disposal of funds at the local banks rose to KD 308 million in May, which prompted the CBK to accept up to KD 306 million of this cash surplus as long-term deposits.

Regarding the exchange rate of the KD, the report said the KD hit a two-year record high vis-@-vis the Euro in early June mainly due to the plummeting of the European currency.

Later on the exchange rate settled when the slump of the Euro stopped, according to the report. The KD-USD exchange rate remained stable as a result of the large percentage the USD accounts for in the basket of foreign currencies to which the KD is pegged. (KUNA)

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