(MENAFN - Kuwait News Agency (KUNA)) Governor of the Central Bank of Kuwait (CBK) Dr. Mohammad Youssef Al-Hashel said Saturday the local banks made relatively good results in the first 9 months of 2012 given "the current conditions."
"The ratio of irregular debts to the total credit facilitating portfolio stood at 6.8 percent by September 30," Al-Hashel said in an exclusive interview to KUNA.
"The ratio of specific and general provisions to the total irregular debts of the banks amounted to 82.2 percent by that time," he noted.
Commenting on the decision to cut the deduction rate by 50 basis points in October, he said it was in keeping with the current conditions of the local market and aimed to improve the performance of non-oil sectors of the economy.
The GDP amounted to 29.2 percent in 2011 compared with the previous year, he noted.
"The decision to bring down the deduction rate has had a good impact on the reality of the fiscal market, the growth of crediting, the exchange rate of the Kuwaiti dinar, and the confidence in the national economy," Al-Hashel affirmed.
"It was part of a range of fiscal measures by the CBK aiming to revitalize the economic growth, reduce the cost of intra-bank crediting and strengthen the financial positions of the banking sector," he went on.
The signs of improvement are seen in the growth of the local bank crediting by 5.1 percent between December 2011 and November 2012, the CBK governor argued.
Regarding the net profits of the local banks in the first nine months of 2012, he said they stood at KD 437.8 million, down by 3.3 percent or KD 14.8 million from the figure of the corresponding period of 2011.
The decline of the profits resulted mainly from the decline of the value of the assets of some banks which necessitated increasing the banks' provisions to face exposure of their clients to risks. "Nevertheless, the results are generally good under the current challenging conditions," Dr. Al-Hashel noted.
The protective monetary policy of the CBK gains additional significance due to the fact that the promising crediting opportunities on the local market are at low ebb, he added.