Kuwait’s fiscal year ends with oil revenues surpassing expectations

However, this average price was about 13.1% lower than the previous fiscal year’s average of $97.1 per barrel. This decrease is due to a decrease in Kuwait’s oil production under the OPEC+ agreements, to settle at 2.41 million barrels per day as of January 1, 2024, a decrease of about 9.8% below budget estimates. Regarding oil revenues, Al-Shall assumed that Kuwait achieved about 21.28 billion dinars for the entire fiscal year 2023/2024, exceeding budget estimates by about 24%. Including these non-oil revenues amounting to about 2.29 billion dinars, it is expected that the total expected revenues for the fiscal year will reach about 23.58 billion dinars.

But comparing this number with expenditure allocations indicates a potential deficit of about 2.74 billion dinars unless total expenditures are reduced. In the banking sector, Al-Shall’s report highlighted a significant growth in the net profits of Kuwaiti banks in 2023 compared to 2022. Net profits for 2023 amounted to about 1.53 billion dinars, which is a record level and an increase of 30.4% over the year 2022. The fourth quarter of 2023 decreased compared to the same period in 2022, and most banks saw an increase in profitability throughout the year.

In addition, the report indicated a slight decrease in the total provisions held by banks in 2023 compared to 2022. Conventional banks accounted for 54.2% of total net profits, while Islamic banks contributed 45.8%, with both seeing significant increases since 2017. 2022. The banking sector’s P/E multiple decreased to about 15.6 times compared to 22.2 times in 2022. Profitability indicators, including return on total assets and return on equity, also improved compared to the previous year. Total cash distributions to the nine banks also increased by about 16.6%. Kuwait Finance House recorded the highest contribution to bank profits in 2023, followed by the National Bank of Kuwait. These two banks accounted for about 74.6% of the total profits, while the rest of the banks contributed about 25.4%. Burgan Bank was the only bank that witnessed a decline in its profits, while the Commercial Bank of Kuwait achieved the highest participation rate among the rest of the banks.

Al-Shall indicated that oil revenues were estimated according to the following principles:

■ The share of crude oil production is equivalent to 2.67 million barrels per day.