"In continuation of Global Investment House coverage of the major sectors in Kuwait, we have come out with a report on Kuwait Banking Sector.
The total assets of the banking sector stood at KD39.2bn at the end of 2008, a growth of 10.4%YoY as against a massive 31.7%YoY rise exhibited by the banking sector in 2007. Signifying the slowest asset growth since 2004 (1.8%YoY), the growth rate confirms the normalization in asset growth of the banking system after a 2-year period of extraordinary movement spanning over 2006 and 2007.
Assets in 2008 were driven almost single-handedly by claims on the private sector or to be more specific by the credit disbursement to residents along with some contribution from foreign assets. Foreign assets grew by almost KD1.2bn during 2008, driven by a substantial increase in deposits with foreign banks and in foreign investments, which grew 13%YoY and 25%YoY respectively in 2008. The increase in foreign assets was however, completely offset by the cumulative decline of over KD1.0bn in deposits placed with the Central Bank and by the decline in the outstanding CBK bonds. Local interbank deposits also fell by a significant KD710mn over 2007 with most of the decline coming in the 2H2008
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