Kuwait’s banking sector sees an increase in coverage of non-performing loans

Despite this, the ratio is considered normal given the booming profits and good financial position of banks in general. The coverage ratio represents the ratio of the total available allocations (from public and private) to the total non-performing loans. In addition, the sector witnessed an increase in the regulatory liquidity ratio from 21.4 percent at the end of 2022 to 22.7 percent at the end of 2023. This ratio reflects the ratio of balances with the Central Bank of Kuwait and government treasury bills and bonds compared to customer deposits in dinars, which meets the minimum The amount is 18 percent.

Moreover, the banking sector maintained a strong capital adequacy index, with the ratio of capital base to Basel III risk-weighted assets reaching 19.9 percent at the end of last year, compared to 19.2 percent in 2022. The sector also witnessed an improvement in net Profitability margin, return on average shareholders’ equity, and operating expense ratio. Despite the positive indicators, the banking sector operates within a diverse, competitive and volatile operating environment. Major projects are delayed, and the role of the private sector in the economy is less than expected. However, there are hopes of liberalizing projects that could lead to an unprecedented development boom, complementing the operational inefficiencies of the modern economy and promoting additional economic activity.

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