Robust economic growth to support Kuwaiti banks, says Moody's | ZAWYA MENA Edition

Robust economic growth to support Kuwaiti banks, says Moody's | ZAWYA MENA Edition:

The outlook for Kuwait's banking system remains stable as robust economic growth will support credit conditions, Moody's Investors Service said.

While high lending concentration to single borrowers and to the volatile real-estate sector pose substantial risks to the country's banks, these are mitigated by very large loan-loss reserves, robust capital and sound liquidity, it said a report issued Wednesday.


"Non-oil GDP growth will remain strong, supporting banks' business-generation," said Nitish Bhojnagarwala, VP-Senior Credit Officer at Moody's. "High lending concentration to single borrowers and to the volatile real-estate sector pose substantial risks to Kuwait's banks, but these are mitigated by very large loan-loss reserves, robust capital and sound liquidity."

Moody's expects non-oil GDP growth to remain strong, picking up to around 3 percent this year from 2.5 percent in 2019. “The government remains committed to its national development plan and its many projects will drive annual credit growth to around 5 percent over our outlook period.”