Total deposits increase by 4.9% in April

Total deposits in the Kuwaiti banking sector increased by 4.9% in April compared to the same month last year. Deposits volume reached more than KD 41 billion in April as per the latest information available at the Central Bank of Kuwait. This annual growth is higher than the annual growth by 4.3% recorded in the same month last year where deposits reached KD 39.1 billion.

Annual growth has exceeded KD 1.9 billion which comes on the back of the annual increase in private sector deposits by more than KD 698 Million i.e. less than average annual growth rate last year 4%. This increase comes on the back of the unprecedented three years activity of government sector deposits which has reached KD 1.2 billion i.e. more than average annual growth rate of 3.1% in 2015.

Deposits volume has improved on monthly basis by 0.2% or KD 76 Million during April compared to a higher monthly increase by 3.6% in March as it exceeded KD 40.9 billion.

Banking sector deposits are considered as a highly significant part of its assets. Deposits share in the banking sector’s assets is increasing as its reached 69.2% *highest in 2 years) in April compared to 68.5% in March. This increase comes on the back of the increase in the share of governor net deposits, thus recording an unprecedented increase since 2013 as it formed 10.8% of assets in addition to a relative stability of private sector deposits which represents 58.4% of assets.

Private sector deposits share declined to record 84.4% of total banking sector deposits. Meanwhile government sector deposits increased to reach 15.7% in April.

Credit facilities, general government debt instruments and local investments are considered as the main activities using banking system deposits in general. Credit activity share in banking deposits continue to decline compared to preceding months as it formed 81.8% of deposits compared to 79.6% of credit in April 2015.

Private sector deposits are still increasing despite the monthly decline witnessed in April, thus recording KD 34.6 billion after increasing to reach KD 35 billion in the preceding month. Deposits declined in April by 1% or KD 361 Million compared to March which has witnessed an increase by 3.9%. Although private sector deposits have declined in April yet such deposits have increased by 2.1% in the same month last year. This ratio is the lowest ratio registered in April for the last 5 years. The ratio registered an annual growth by 6% in April last year.

Private sector deposits share in offered cash has declined in April at the back of the increase in government sector deposits. Offered cash represents 88.1% of deposits in April compared to 89.1% in March. Private sector deposits formed 95.7% of offered cash in April and did not witness any change compared to the preceding month. Meanwhile offered cash declined by 0.9% in April which relatively less than the decline ratio in private sector deposits. The volume of offered cash reached KD 36.1 billion in April. However, annual growth ratio reached 2% in April this year. Credit share granted by private sector improved to reach 96.9% compared to the share in March. These levels still exceed the credit activity share which represented 91.8% of private sector deposits in April last year.

Private sector deposits comprise local currency and foreign currency deposits. Private sector local and foreign currency deposits stabilized in April at 89.6% and 10.4 % respectively. Private sector local currency deposits share in April this year is higher compared to last year as it formed 86.9%. Meanwhile, private sector foreign currency deposits was less than its share which reached 13.1% of private sector deposits in April last year. Local currency deposits comprise three types of deposits as per maturity dates including call deposits, saving deposits and time deposits.

The distribution of local currency deposits based on their maturity dates indicate that time deposits dominate the major part of local currency deposits by 59% of total local currency deposits during April and March compared to 56.7% in April last year. Call deposits share has declined relatively to reach 25.8% in April. However, saving deposits have improved to reach 15.1% of total private sector local currency deposits in April compared to 14.8% in March.

Looking at the components of private sector local currency deposits we find that call deposits have declined in April by 2.3% or KD 189 Million compared to 3.7% in March. Call deposits have exceeded KD 7.9 billion in April compared to 8.2 billion in March. Saving deposits increased in April by 1.2% or KD 56 Million compared to their volume in March. Saving Deposits reached KD 4.69 billion in April compared to KD 4.63 billion in March. Private sector time deposits declined by 1% in April or KD 172.5 Million compared to the preceding month as it reached KD 18.3 billion in April compared to KD 18.5 billion in March.

Based on the above private sector local currency deposits declined to reach KD 30.99 billion in April i.e. a decline by 1% or KD 305 Million compared to KD 31.3 billion in March. This monthly decline in April comes following a monthly increase by 3.7% in March. On the other hand, private sector foreign currency deposits declined to reach KD 3.6 billion in April i.e. a decline by 1.5% or KD 55 Million compared to KD 3.7 billion in March. This monthly decline comes following a significant monthly increase by 5.4% in March, thus repeating the same decline trend in preceding months bearing in mind that some months recorded a significant increase.

Concerning annual growth of private sector deposits in April, private sector call deposits increased by 1% compared to the same month last year, which is the same annual increase in April last year. Time deposits annual growth recorded 7% compared to last year, bearing in mind that the annual growth in March was higher than the annual growth in April.

Annual growth ratio of private sector local currency deposits stabilized in April and March thus recording 5.2% compared to the same period last year. Annual growth ratio is higher than the annual growth ratio by 2.2% recorded in April last year. Meanwhile, foreign currency deposits declined significantly in April by 18.9% compared to the same month last year. These ratios are considered significant growth ratios compared to the decline by 4% in March on annual basis. Annual growth ratio reached 41% in April last year.

Government deposits in local banks increased thus recording 6.4 billion in April, i.e. a monthly increase by 7.3% in April or KD 436 million. This ratio is an unprecedented ratio since 2012. Government sector deposits reached KD 5.99 billion in March. Government sector deposits increased in April this year by an unprecedented ratios 23.5% compared to April last year, bearing in mind that it recorded an annual decline by 5.7% in April last year.

Based on this significant performance government deposits share increased to reach 15.7% of total banking sector deposits in April compared to 14.6% in March. Government deposits share reached 13.3% in April last year.

Government sector deposits distribution indicate that government sector time deposits represent the major part of government deposits, thus representing 92% of total sector deposits in April. Meanwhile call deposits share formed 8% in April.

Government call deposits reached an unprecedented level, thus recording KD 515 Million in April ie a monthly increase by more than 97% or KD 254 Million compared to KD 261 Million in March. This monthly performance comes after the significant increase by 81% in March compared to the preceding month.

Government sector time deposits increased to reach KD 5.6 billion i.e. an increase by 3.2% or KD 182 Million compared to KD 5.7 billion in March, bearing in mind that the increase realized in March reached 0.2%.

On annual basis government call deposits increased by more than KD 322 Million compared to the same month last year, thus recording an unprecedented increase by 167% compared to April last year. Government call deposits recorded an increase by 34% on annual basis in April last year.

Government sector time deposits annual growth ratio increased thus recording 18% in April this year compared to 16.5% in March. These ratios are considered as positive ratios compared to last year ratios which recorded a decline by 6.8% on annual basis.

Kuwaiti local banks assets declined by 1% IN April or KD 519 Million thus recording KD 59.3 billion compared to KD 59.8 billion in March in which bank assets increased on monthly basis by 1.8%. Local banks assets in April this year were higher by 4.2% or KD 2.4 billion compared to their volume in the same month last year. Current year witnessed an annual increase that is less than the annual increase recorded last year by 4.9% as assets reached KD 56.9 billion.