One Billion Dinars In Deposits Left The Banking Sector Within A Year - Kuwait Finance House

Report issued by the Kuwait Finance House (KFH) said that the private sector deposits witnessed an annual decline at the end of last July, driven by a decrease in term deposits, despite a noticeable increase in savings deposits and a limited increase in demand deposits, while deposits in foreign currency rose, and government deposits declined for the fifth month. Straight.

The continued low rates of investment returns may contribute to the tendency of some individuals to invest their savings in alternative channels, which may lead to positive effects and revitalize some economic sectors that attracted this liquidity. The volume of deposits decreased by 2.2% on an annual basis for the fourth consecutive month in July, Compared to an annual decline of 1.9% in June, deposit balances in local banks approached 43.9 billion dinars, while credit recorded an annual growth of 3.5% in July, and credit facilities balances amounted to 40.9 billion dinars.

As for the sectors that are expected to have directed liquidity from Kuwaiti banks, such as real estate trading and the stock market, the real estate achieved levels that exceeded before the Covid-19 crisis, recording 407.4 million dinars in July, but it decreased by 1.4% on a monthly basis, while it rose to more than double its value on an annual basis. While the trading of the Kuwait Stock Exchange is close to 752 billion dinars, down 47.1% on a monthly basis, while it is 42.2% higher than July 2020.

Decrease in deposits

The value of the annual decline in total deposits amounted to about one billion dinars, with the government sector deposits declining 7.8% (583 million dinars). While private sector deposits decreased slightly by 1.1% (421 million dinars), after recording an increase in the last months of 2020.

When compared on a monthly basis in July 2021, total deposits decreased by 0.6% by about 253 million dinars, after recording a limited monthly increase in June, with a slight decrease in private sector deposits by 0.8%, or 301 million dinars, while government deposits rose on a monthly basis by 0.7% to 6.9 billion dinars by the end of July. At the same time, granted credit rose on a monthly basis by 0.4% by about 148 million dinars.

deposit structure

The share of deposits for the private sector stabilized at 84.2% in July, compared to 84.4% of total deposits in June, which is higher than the share of 83.3% in July 2020, while the share of government sector deposits represented 15.8% in July compared to 15.6% of total deposits in June, which are levels Less than its share of 16.7% in the same period last year, driven by the decline in government deposits and private sector deposits by a limited percentage on an annual basis. Total deposits represent 59.4% of banks’ assets in July, slightly higher than their share of 58.9% in June, and therefore still at the lowest level for their share of assets since 2009, compared to 62.1% in July 2020.

Total private

deposits The private sector’s deposits reached the end of July 2021 About 36.98 billion dinars, recording an annual decline of 1.1% compared to an approximately annual decline in June, and its volume decreased by 0.8%, or 301 million dinars on a monthly basis.

The private sector deposits consist of the total deposits in local currency and deposits in foreign currencies. The share of deposits in local currency improved to 94% of private sector deposits, compared to 93.7% in June, while it is lower than the share of 94.5% in July 2020, while deposits in foreign currencies account for the remaining share. That is, 6% in July, compared to 6.3% in June, and thus improved from its share of 5.5% of private sector deposits in July 2020.

The distribution of deposits in local currency according to their terms indicates that time deposits represent the bulk of the private sector’s deposits in local currency. Their share increased in July to 49.4% of deposits in local currency, compared to 48.7% in June. Despite this increase, its share still tends to decline as it is considered the lowest On an annual basis, compared to a share that represented 53.4% ​​at the end of July 2020, while the share of demand deposits decreased to 31% in July, compared to 31.8% of total deposits in local currency during June, but it is slightly higher than a share that represented 29.3% in July 2020, while the share of Savings deposits slightly amounted to 19.6% of the total local currency deposits in July, compared to 19.4% in June, and therefore they are witnessing an increase from their level in the same months of 2020, which accounted for 17.3% of local currency deposits for the private sector.

6.9 billion dinars in government sector deposits

The KFH report stated that government sector deposits in Kuwaiti banks decreased to 6.9 billion dinars in July, by 7.8%, after declining annually by 5.5% in June, while they witnessed a slight monthly improvement of 0.7%, or 48 million dinars at the end of July 2021.

The distribution of sector deposits indicates The government sector, according to its deadlines, indicated that government sector time deposits represent the largest part of government sector deposits, with a share of 95.7%, lower than its share in June of 95.9%, and without an annual basis change, while government demand deposits constitute 4.3% in July and their share did not change from the same month. 2020.

 

SOURCE : KUWAIT OFFERINGS

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