Kuwait credit growth up 5.8pc
Kuwait, June 30, 2013
Kuwait witnessed a healthy growth in its bank credit during April which surged 5.8 per cent year-on-year to hit KD27.51 billion ($96.2 billion) mainly driven by the household credit and non-financial business sectors, said a report.
The growth in the household sector was healthy, with personal facilities (ex-securities) up by KD119 million in April. The monthly gain was notably larger than in previous months, suggesting household borrowing remains solid, according to a report by country's top lender National Bank of Kuwait (NBK).
The strong growth in household credit has boosted its share of total credit, raising it by nearly 3 percentage points in the last 12 months to reach 28 per cent, it stated.
The household credit continued to show strength, while non-financial business sectors experienced a third consecutive month of solid growth, said the report.
"If this pace is maintained, we expect credit growth to approach seven per cent in 2013, its strongest since 2009. Despite this, private deposit growth continued to outpace credit growth, boosting bank liquidity," it added.
According to NBK, the y/y rate of growth accelerated to 17.9 per cent. "In the coming months, with the implementation of the Family Fund law, reported household debt may actually decline as some debt will be transferred to the government."
The total bank credit rose by a solid KD169 million in April to KD27.51 billion, up 5.8 per cent year-on-year. The net credit gains thus far in 2013 averaged KD173 million a month, up from an average of KD100 million a month during 2012.
This came at the expense of non-bank financial (NBF) credit, which saw its share decline to 6.5 per cent on the sector’s ongoing deleveraging. The sector also saw the decline of NBF credit resume following a modest rise in March, falling by KD 51 million, said the top lender.
NBK pointed out that the non-financial business activity saw its growth pickup sustained in April, with its third consecutive month of healthy growth. April saw credit up KD101 million, it stated.
Gains during the month were led by real estate and other credit facilities. Meanwhile, oil & gas, trade, and industry saw declines in total credit, said the report.
Private sector deposits saw a fifth strong consecutive monthly gain with its total of KD351 million, exclusively in local currency sight and saving accounts.
Gains have averaged KD450 million per month since December 2012, helping reduce the loan-to-deposit ratio by 2.8 percentage points to 91.6 per cent over the last five months, said the top Kuwaiti bank in its report.-TradeArabia News Service