Settlement operations among local consolidated banks in Kuwait experienced a notable 11.6% decrease over the first 11 months of 2023, amounting to approximately 31.1 billion dinars. Despite a 5.9% monthly increase in November, reaching 27.789 billion dinars, various factors contributed to the overall decline, notably affecting banks in 2022. Data from the Central Bank of Kuwait reveals insights into the dynamics of settlement operations, credit facilities, deposits, and other key financial indicators.
Settlement Operations
The decline in settlement operations contrasted with a 59.1% annual increase in November, totaling 10.32 billion dinars, compared to 17.46 billion dinars at the end of November 2022. This apparent contradiction suggests a complex interplay of factors influencing the financial landscape. The total number of settlement operations, however, increased by 3.4% over the first 11 months of 2023, reaching 2.254 million transactions.
Credit Facilities
The decline in settlement operations coincided with a 2.6% reduction in new credit facilities, consolidating at 20.72 billion dinars in the first 11 months of 2023 from 21.27 billion dinars in the same period of 2022. Personal facilities showed a substantial 29.8% decrease, totaling 3.38 billion dinars, down from 4.822 billion dinars in the 11 months of 2022. Consumer loans decreased by 6.6% to 852.2 million dinars, and housing loans dropped by 37% to 1.759 billion dinars. These figures indicate a cautious approach to lending and borrowing among local banks.
Deposits
On a positive note, total deposits with local banks increased by 2.9%, reaching 48.269 billion dinars at the end of November 2023 from 46.91 billion dinars in December 2022. This rise in deposits suggests a potential increase in liquidity and confidence in the banking sector, providing a stabilizing factor amid other challenges.
Checks and Transactions
The value of checks issued between banks, including the Central Bank of Kuwait and the Kuwait Credit Bank, decreased by 6.4% in November, amounting to 1.503 billion dinars. On an annual basis, the total value of checks issued between banks during the first 11 months of 2023 decreased by 5.7% to 15.676 billion dinars. Check settlements dropped by 7.97% in November to 208.8 thousand transactions, but on an annual basis, it decreased by 0.6%. These trends suggest a shift in the use of traditional financial instruments.
The 11.6% decline in settlement operations among consolidated local banks in Kuwait during the first 11 months of 2023 reflects a complex financial landscape influenced by various factors. While credit facilities experienced a reduction, total deposits increased, indicating a mixed sentiment in the banking sector. The dynamics of settlement operations, credit facilities, and deposits provide valuable insights for stakeholders to navigate the evolving financial environment in Kuwait.
