Zero-interest deposits exceed 10.1 bln dinars as Kuwait’s banking liquidity strengthens

• A strong inflow from the private sector powered a 9.7 percent rise in total bank deposits during the first 11 months of 2025, with interest-free accounts emerging as a key contributor amid shifting depositor behaviour and improving liquidity conditions.
• The figures underline the robust liquidity position of Kuwaiti banks, driven primarily by private sector inflows and the growing role of interest-free and mid-yield deposits, even as government balances continue to contract.
• Government deposits continued their downward trend, declining 18.1 percent, or 920.4 million dinars, from 5.08 billion dinars in December 2024 to 4.162 billion dinars in November 2

Data released by the Central Bank of Kuwait for the first 11 months of 2025 show that interest-free deposits in the banking sector reached 10.178 billion dinars, reflecting a growth of 0.9 percent, or 85.8 million dinars.

These deposits now account for more than 24.7 percent of total private sector deposits in dinars held by residents and non-residents, which stood at 41.193 billion dinars, up 4.7 percent, or 214.5 million dinars over the period.

The distribution of deposits by interest rate reveals a strong concentration, with five interest bands representing nearly 94 percent of total deposits, equivalent to 38.72 billion d, reports Al–Rai daily.

After zero-interest deposits, the largest share was recorded in deposits earning 4 to 4.5 percent, which represented 20.7 percent of the total, or 8.528 billion dinars.

This was followed by deposits yielding 3.5 to 4 percent at 19.22 percent, or 7.921 billion dinars.

Deposits with interest rates up to 2 percent accounted for 15.7 percent, equivalent to 6.46 billion dinars, while those earning 3 to 3.5 percent represented 13.67 percent, or 5.63 billion dinars. Deposits in the 4.5 percent band stood at 5.3 percent, with a value of 2.177 billion dinars.

In terms of growth performance, deposits earning 2 to 2.5 percent recorded the highest increase, surging 197.5 percent to 72.6 million dinars. Deposits in the 3 to 3.5 percent range also posted strong gains, rising 94.3 percent to 5.633 billion dinars.

By contrast, the steepest declines were seen in deposits earning 5.5 to 6 percent, which fell 69.2 percent to 37.6 million dinars, followed by deposits in the 4.5 to 5 percent band, down 20.7 percent to 2.177 billion dinars. Deposits earning 2.5 to 3 percent also declined 14.4 percent to 135.2 million dinars.

Overall, total bank deposits in dinars and foreign currencies rose 9.7 percent, or 5.237 billion dinars, from the start of 2025 to reach 59.06 billion dinars by the end of November, compared with 53.82 billion dinars in December 2024. Private sector deposits were the main driver, increasing 9 percent, or 3.75 billion dinars, to reach 45.386 billion dinars. In contrast, foreign currency deposits declined 3.1 percent on a monthly basis to 1.9 billion dinars.

Deposits of public institutions recorded a sharp expansion, jumping 33.7 percent, or around 2.4 billion dinars, to rise from 7.11 billion to 9.51 billion dinars. On a monthly basis, these deposits also grew 7.6 percent, or 672.4 million dinars, compared with 8.838 billion dinars in October.

Conversely, government deposits continued their downward trend, declining 18.1 percent, or 920.4 million dinars, from 5.08 billion dinars in December 2024 to 4.162 billion dinars in November 2025. On a year-on-year basis, government deposits fell 17.8 percent, or about 900.8 million dinars, while on a monthly basis they declined 4.6 percent, or 201.4 million dinars, compared with 4.364 billion dinars in October.

The figures underline the robust liquidity position of Kuwaiti banks, driven primarily by private sector inflows and the growing role of interest-free and mid-yield deposits, even as government balances continue to contract.