Kuwait domestic credit growth accelerates to 1.7% in third quarter

Summary

• Domestic credit grew 1.7% quarter-on-quarter in Q3, up from 1.2% in the previous quarter
• Cumulative credit expansion since the start of the year reached 4.7%, according to National Bank of Kuwait
• Faster lending alongside a 2.4% deposit rise points to broader liquidity in Kuwait's banking system

The latest

Domestic credit in Kuwait expanded 1.7% quarter-on-quarter in the third quarter, up from 1.2% in the preceding quarter, according to an economic report by National Bank of Kuwait. The acceleration lifted cumulative credit growth since the beginning of the year to 4.7%. Resident deposits rose 2.4% over the same quarter.

Details

• The headline figure: National Bank of Kuwait reported that domestic credit growth quickened to 1.7% on a quarterly basis in the third quarter, compared with 1.2% in the quarter before it. The step-up marks a faster pace of lending expansion within a single three-month window.
• Year-to-date pace: Cumulative credit growth since the start of the year reached 4.7%, according to the report. The figure places the third-quarter reading as the strongest quarterly contribution to the annual total disclosed so far.
• Deposits: Resident deposits grew 2.4% during the third quarter, according to the same report. Deposit growth running ahead of the quarterly credit rate indicates funding inflows into the banking system kept pace with, and exceeded, the expansion in lending.
• Public sector funds: Public sector deposits rose 9% in the quarter, according to National Bank of Kuwait, outpacing the overall resident deposit figure by a wide margin and standing out as the single largest percentage move in the data set released.
• The comparison: The 9% increase in public sector deposits is nearly four times the 2.4% rise in total resident deposits, making state-linked funds the main driver behind the quarter's deposit growth rather than a uniform rise across depositor categories.
• Source of the data: The figures come from an economic report issued by National Bank of Kuwait, Kuwait's largest lender, and were carried by the state news agency KUNA. The report covers the third quarter on a quarter-on-quarter basis.
• Not disclosed: The report did not break down the credit growth by sector, nor did it identify which borrower categories accounted for the acceleration from 1.2% to 1.7%. No full-year projection was attached to the quarterly readings.

Between the lines

Two figures in the quarter move in the same direction but at different speeds: credit at 1.7% and deposits at 2.4%, with public sector deposits at 9%. That gap suggests the quarter's liquidity build-up leaned heavily on state-linked funds rather than on a broad-based rise across depositors.

What's next

The fourth-quarter reading will show whether the 1.7% pace holds or reverts toward the earlier 1.2%, and whether public sector deposits sustain the 9% jump that drove the quarter's funding growth.

Source: KUNA, National Bank of Kuwait report