Local banks’ foreign deposits hit KD 5.22 billion, down 6.7% in H1 2024
Loans from local banks to foreign banks grew annually by 16.8%, increasing by KD 385 million, with the total value rising from KD 2.291 billion to KD 2.676 billion.
• Government deposits in the banking sector maintain a significant balance at all levels, including pricing, on a general average.
• Financing operations for external and foreign organizations grew by 30.5% in the first half of this year, representing an increase of KD 1.048 billion.
• The total value of banking sector deposits with foreign banks, facilities for foreign institutions, and foreign bank loans reached about KD 12.2 billion.
Banking sources have assured Al Jarida newspaper that financing sources for deposits in the local market are secure, with ample liquidity available at all levels. This includes funds from the private sector and high-net-worth clients with strong cash flow, reflecting the nature of their activities and operations.
Regarding the growing expectations of a reduction in the US interest rate, the source emphasized that government deposits in the banking sector maintain a significant balance at all levels, including pricing, on a general average.
Regarding liquidity in the banking sector, deposits from local banks with foreign banks totaled about KD 5.225 billion in the first half of 2024, compared to KD 5.599 billion for the same period last year. This represents a slight year-on-year decrease of approximately 6.7%.
Banking sector sees major changes in H1 2024 compared to 2023
In this context, banking sector data revealed that financing operations for external and foreign organizations grew by 30.5% in the first half of this year, representing an increase of KD 1.048 billion.
A banking source explained that most of these facilities are for foreign investors, major foreign companies, and some units of parent companies involved in development projects in Kuwait.
Additionally, the growth in corporate and foreign institutional banking operations reflects a strategy of risk distribution and the exploration of new markets and channels. This expansion accommodates the growth of banks’ businesses and their increasing liquidity amid intensifying local competition and a limited market.
The decline in value over the recent period amounted to approximately KD 374 million, resulting from payments due during the two quarters ending on June 30.
It is noteworthy that foreign windows offer banks not only diversification and risk distribution but also opportunities to invest excess liquidity. Loans from local banks to foreign banks grew annually by 16.8%, increasing by KD 385 million, with the total value rising from KD 2.291 billion to KD 2.676 billion.
The total value of banking sector deposits with foreign banks, facilities for foreign institutions, and foreign bank loans is estimated at about KD 12.2 billion.
