Banking
From The Report: Kuwait 2017
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In a lower oil price environment such as the one that has persisted since late 2014, banking sectors in the GCC find themselves under heightened scrutiny. Kuwait is no exception, but where other banking sectors in the region have been compelled to face sizeable cutbacks in government spending, the nation’s deep reserves have enabled it to defend the development pipeline on which so much of the industry’s business depends. Although challenges through 2016 put pressures on profits and credit growth, these were not seen as threats to sector stability. Nevertheless, challenges remain. The recent economic downturn has highlighted the sector’s dependence on government spending, while an increasingly comprehensive regulatory environment is starting to affect some of the industry’s key ratios. Exploiting untapped areas of the economy and seeking new efficiencies are therefore emerging as the key priorities for the industry in the year ahead.

This chapter contains an interview with Mohammad Y Al Hashel, Governor, Central Bank of Kuwait.

Articles from this Chapter

Overview

An ever-adapting approach: Ongoing reforms work to sustainably strengthen the sector
OBG
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In a lower oil price environment such as the one that has persisted since late 2014, banking sectors in the GCC find themselves under heightened scrutiny. Kuwait is no exception, but where other banking sectors in the region have been compelled to face sizeable cutbacks in government spending, the nation’s deep reserves have enabled it to defend the development pipeline on which so much of the industry’s business depends. Though challenges through 2016 put pressures on profits and credit…

Interview

Maintaining stability: Mohammad Y Al Hashel, Governor, Central Bank of Kuwait (CBK), on managing industry changes
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Interview:Mohammad Y Al Hashel Amid challenging local and regional conditions, how is the CBK looking to maintain a stable and robust financial environment? MOHAMMAD Y AL HASHEL: The CBK has the mandate to maintain monetary and exchange rate stability, and to ensure a stable financial system capable of withstanding stress. In December 2016 the CBK increased the discount rate by 25 basis points, pushing the policy rate to 2.5%. While the rate hike was marginal, it aimed to indicate the CBK’s…

Analysis

Safeguarding growth: Authorities are working to ensure a resilient banking industry
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Banking sector liquidity has not been a concern in the GCC for nearly 10 years, but the rapid decline of crude oil prices that began in the summer of 2014 has made the issue a regional challenge once again. The central role played by oil and gas in GCC economies means that large movements in spot prices and energy futures have the potential to significantly influence the liquidity position of regional banking sectors, undermining the ability of individual institutions to carry out their core…