(MENAFN - Kuwait News Agency (KUNA)) Credit saw a small drop in October and year-end credit growth is seen to be near 6%, expected a report issued today by the National Bank of Kuwait (NBK). The report said that " Credit saw a drop in October following two strong months.
Despite this, growth is still expected to finish the year on a healthy note. Personal facilities continue to carry credit growth while credit to the nonbank financial sector remained a drag due to ongoing deleveraging. Private deposits saw a small increase in October." The report added that " Outstanding credit to non-citizen residents of Kuwait stood at KD 26.8 billion in October, down KD 48 million on the month. This was the largest drop in over a year. Total credit is still up a good KD 1.
15 bn year-to-date (ytd) and year-on year growth is now 5.0% and should finish the year at around 6%." As for consumer credit, the report indicated that" Consumer/household lending growth remains strong as personal facilities (excl. securities) saw another strong gain in October. The gain offset much of the credit losses in other sectors. Rising KD 116 million, this sector has added KD 846 million to outstanding loans ytd and is up 15.6% y/y." Regarding business credit, the report said that " Trade, industry and other business credits drove most of the drop in credit, in addition to a larger than usual decline in lending to non-bank financials.
The latter was down KD 40 million in October, off 16.7% on the year. Other declines were largely in industry (down KD 28 mn) and trade (down KD 19 mn) and "other" (down KD 69 mn). Construction was alone in seeing a small rise (up KD 7 mn) while real estate lending was flat." On the status of money supply, the report said that " An increase in sight and saving deposits caused both the narrow (M1) and broad (M2) measures of money supply to expand by KD 99 million and KD 84 million, respectively. M1 and M2 are up 10.2% and 5% y/y respectively.
" Private sector resident deposits were up a small KD 46 million in October, a pace similar to the September gain. While dinar deposits rose by KD 143 million, this was offset by a decline in foreign currency deposits, which followed a large increase in September.
Gains in dinar saving and sight deposits were partly offset by a decline in dinar time deposits. " Deposit rates on dinar time deposits fell between 11 and 16 basis points across maturities in October.
This coincided with the October discount rate cut and took average rates for the month down. The 1-month, 3-month-, 6-month and 12-month deposit rates averaged 0.64%, 0.86%, 1.09% and 1.34%."