Loan Installments ... Are Back

As of yesterday, local banks have resumed deducting loan installments that they had previously ceased to collect, as part of a voluntary initiative in response to the risks of the Corona pandemic, since last April, for a period of 6 consecutive months, which ended last September. The banks had announced the postponement of customer loan installments and small and medium-sized companies by 6 months, bearing the financial cost involved, given the economic repercussions that resulted from facing the spread of the Coronavirus.

The banks' decision included the postponement of consumer and installment loan installments and credit card installments for all local bank customers, with the cancellation of the interest and profits resulting from this postponement and any other fees. It also included the postponement of loan installments and credit facilities for bank customers who own small and medium enterprises for a period of 6 months, with the cancellation of the interest and profits resulting from this postponement.

The decision to postpone consumer loan installments for all of its individual customers for a period of 6 months incurred losses amounting to 380 million dinars, which also contributed to the decline in bank profits by 53% in the first half of 2020.

With the 6-month deadline approaching the expiration date, popular calls have been raised to demand an extension of the decision to postpone installments for another 6 months, a wave that parliamentary parties tried to ride, as some 41 parliamentarians submitted a proposal to postpone installments, which met a categorical government and banking refusal, given that To the severe damage inflicted on banks, and the lack of need for it in light of a society in which more than 90% of the national workforce works in the government sector.

Despite the great challenges that await the banks, their return to deduct loan installments again will positively affect their budgets and protect them from incurring an additional 380 million dinars, in case the parliamentary efforts to extend the installments postponement succeed.

For its part, banking sources said that the banks have fulfilled their duty towards society by bearing the cost of their decision at the beginning of the crisis to postpone the repayment of loan installments for a period of 6 months, which incurred losses that exceeded 370 million dinars, which will be reflected in their budgets for the next 4 years.

Stock market recovery

In addition, bank shares yesterday led the stock market indices to the green zone, after several sessions of decline, to close the general market index up by 0.3%, through the circulation of 253 million shares, worth 62.6 million dinars, through 13.5 thousand transactions.

3 banks acquired 48.8% of the liquidity traded on the stock exchange yesterday, with a share of 12.7 million dinars for the "National" share and 12.1 million for "KFH", compared to 5.8 million dinars for the "Ahli United" share. The first market index rose 0.4%, through the circulation of 128 million shares, worth 56.5 million dinars, through 9.5 thousand transactions. The number of shares that were traded in yesterday's session was about 118 shares, of which 62 stocks made gains, while 41 shares declined, and 15 shares remained unchanged.

In turn, investment sources said: The market indicators are anticipating two important events in the coming period; The first is the announcement of the banks' results in the third quarter, and the second is the promotion of the Kuwait Stock Exchange to the MSCI index, expecting the market to witness a new wave of recovery during the coming period.

She indicated that the majority of banks raised their budgets to the Central Bank of Kuwait, in preparation for approval and disclosure, noting that the disclosure period for listed companies ends in mid-November, while the shares of companies that do not advertise will not be suspended for another 15 days, up to the end of next November.

 

SOURCE: ALQABAS

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