Kuwait's credit growth stands at 4.4 pct in Nov. - NBK

KUWAIT, Jan 23 (KUNA) -- Credit growth slowed once again in November, as outstanding debt saw another decline during the month, a reported by the National Bank of Kuwait has showed.
"Growth came in at 4.4 percent year-on-year (y/y) as credit fell by KD 34 million. Most of the weakness was in the industrial sector, while household loans saw another strong month," reads the report.
It pointed out that growth continued to reflect the large repayment of debt by a Kuwaiti listed corporate in October.
"Adjusted for the latter, credit is estimated to have registered growth of 6.5 percent y/y. Projections for 2016 still see credit growth averaging seven percent," it projected.
Meanwhile, the data showed that the private deposits were up while government deposits saw a second consecutive month of decline. Interest rates on both interbank lending and deposits were lower on the month.
The NBK stated that the household lending saw a second month of robust gains in November, though growth continued to moderate to 6.8 percent y/y. Gains continued to come from installment loans, consumer loans saw a small decline.
Lending to nonbank financial companies saw a small decline, though it continued to see positive growth from a year ago. Sector debt was down KD nine million, with growth steady at 6.5 percent y/y. The sector appears to have largely completed deleveraging that began in the wake of the 2008 financial crisis.
"All remaining credit declined by KD 108 million, with growth slipping to 3.1 percent y/y. Much of the weakness came from a KD 170 million drop in lending to the industrial sector. Lending for the purchase of securities was also down KD 37 million. These were partly offset by gains in real estate and the crude oil & gas sector," the report noted.
In the meantime, the private deposits were up a small KD 57 million in November, with broad M2 money supply growth accelerating further for a second consecutive month to 6.5 percent y/y.
"Growth in the narrower M1 money supply also improved to 5.2 percent y/y. There was a modest shift of deposits from KD time deposits into KD sight, savings and FX deposits. Meanwhile, government deposits fell by KD 142 million during the month, with growth easing notably to 14 percent y/y," it added.
The banking system liquidity decreased in November but remained healthy. Bank reserves (cash, deposits with the CBK and CBK bonds) lost KD 189 million to reach KD 5.3 billion or 8.8 percent of total bank assets.
"This coincided with the government continuing to tap bank liquidity through issuance of domestic bonds; outstanding domestic public debt instruments (PDIs) rose by KD 200 million during November to KD 3.17 billion or an estimated 9.4 percent of GDP," the NBK clarified. It pointed out the interest rates edged lower in November as the liquidity situation in Kuwait remained comfortable.
The three-month Kuwait interbank offered rate (Kibor) edged lower in November to 1.46 percent and has held steady since. The rate ended 2016 at 1.44 percent, apparently unfazed by the CBK's 25 basis point (bp) discount rate hike in December. Meanwhile, customer deposit rates were lower by 2-4 bps in November, the report concluded. (end) fnk.ibi