Kamco Invest reported that Kuwaiti banks recorded the strongest loan growth rate in the Gulf on a quarterly basis in the fourth quarter of last year, mainly due to the acquisition of Al-Ahli United Bank by Kuwait Finance House and the resulting merger of the combined credit portfolio of the two banks.
Kamco Invest expected that the Gulf banking sector, in general, would witness a limited indirect impact as a result of the banking crisis that the United States and Europe are currently witnessing, noting that the rise in interest rates in the United States and the adoption of almost the same approach by most Gulf central banks during the year 2022 led to a net increase. The interest margin for the Gulf banking sector, as the average net interest margin for GCC banks exceeded its highest levels recorded in several years and reached more than 3 percent during the fourth quarter of 2022, reports Al-Rai daily.
The company pointed out in its report that the net profit of the Gulf banking sector remained unchanged on a quarterly basis and did not witness a significant change, as it amounted to $11.4 billion, consistent with the performance of the previous quarter. These results came despite the increase in net interest and non-interest income during the quarter period with total bank revenues reaching a new record of $28 billion, profit growth was offset by higher operating expenses as well as increased provisions in the fourth quarter of 2022.
The company added, “The total value of loans provided by Gulf banks reached a new record of $1.87 trillion, with a growth of 3.2 percent, or the equivalent of $57.5 billion, during this quarter. Net Non-Performing Loans grew slightly lower by 2.8 percent during the quarter due to higher provisions held during the fourth quarter.
He pointed out that customer deposits recorded strong growth again during the fourth quarter of 2022, after a decline in growth rates during the previous quarter, which reached the lowest levels recorded in six quarters, as the total growth of customer deposits on a quarterly basis reached 2.5 percent, down to 2.2 percent. Trillion dollars.
He noted the growth of the ratio of loans to deposits in the GCC countries by the end of the fourth quarter of 2022 by 30 basis points, but it remained below the level of 80 percent, which is considered one of the lowest levels recorded on a quarterly basis, as it reached 79.3 percent on the back of a decline This rate for Kuwait and Qatar is at a rate that exceeds the growth of the rest of the markets.
He emphasized that credit growth in the GCC countries remained strong during the fourth quarter of 2022 despite the rise in interest rates, pointing out that growth for Kuwaiti banks was modest, reaching 0.9 percent on a quarterly basis and was the lowest growth rate recorded since the fourth quarter of 2020.
The report revealed that total customer deposits with banks listed on Gulf stock exchanges continued to grow during the fourth quarter of 2022, bringing the total to a new record level of $2.2 trillion, with a quarterly growth rate of 2.5 percent.
And he stated that the total provisions for loan losses for banks listed on the Gulf stock exchanges remained high in the fourth quarter of 2022, reaching $3.3 billion, which is the highest level recorded in 4 quarterly periods, noting that the increase in provisions increased by 1.8 percent, or the equivalent of 0.1 billion. Dollars mainly reflects the rise in provisions held by listed banks in the UAE, Qatar, Saudi Arabia and Oman, which was offset by a sharp decline in the value of provisions held by banks in Kuwait and Bahrain.
The report stated that net interest income in UAE banks grew at double-digit rates of 17.8 percent, followed by Kuwaiti and Saudi banks, respectively.
Kamco Invest reported that the profitability of the Gulf banking sector exceeded pre-pandemic levels and reached another record level during 2022, as its total profits increased over the past year by about 27.1 percent to reach $44.8 billion, explaining that the total revenues of Gulf banks increased by about 16.4 percent. percent to $104.8 billion, the highest percentage ever driven mainly by an increase in net interest income as well as non-interest income.
The report pointed out that the provisions for loan losses reported by GCC banks decreased during 2022, to reach $11.9 billion, compared to $14 billion in 2021.
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