Kuwait credit growth moder­ates to 7.2% in Sept

Kuwait Times - - BUSINESS -

Out­stand­ing bank credit recorded a healthy gain in Septem­ber, but saw growth slow no­tably to 7.2 per­cent year-on-year (y/y) due to base ef­fects. Loans rose by a good KD 272 mil­lion, driven largely by lend­ing for the pur­chase of se­cu­ri­ties. Mean­while, house­hold loans were flat dur­ing the month and busi­ness credit was mixed. Pri­vate de­posits saw a solid gain dur­ing the month com­bined with a smaller in­crease in gov­ern­ment de­posits. Do­mes­tic in­ter­est rates held steady through­out the month.

House­hold lend­ing was flat in Septem­ber, with growth slow­ing to 7.2 per­cent fol­low­ing months of soft­en­ing. The ab­sence of growth dur­ing the month was the worst re­sult since early 2011, though it did come on the heels of a strong show­ing in Au­gust. As a re­sult, growth was the the last twelve months com­pared to a gain of only KD 825 mil­lion in pri­vate de­posits dur­ing the same pe­riod.

Bank­ing sys­tem liq­uid­ity im­proved in Septem­ber, fur­ther bol­ster­ing its healthy level. Bank re­serves (i.e. cash, de­posits with the CBK and CBK bonds) added KD 210 mil­lion to reach KD 5.8 bil­lion or 9.5 per­cent of to­tal bank as­sets. The in­crease was pre­dom­i­nantly in time de­posits with the CBK and co­in­cided with a KD 413 mil­lion in­crease in CBK for­eign re­serves, which jumped to KD 8.1 bil­lion. Mean­while, net do­mes­tic debt is­suance, which taps back liq­uid­ity, rose from the pre­vi­ous month; out­stand­ing pub­lic debt in­stru­ments (PDIs) rose by KD 200 mil­lion dur­ing Septem­ber to KD 2.77 bil­lion.

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