Credit saw strong growth in May, says NBK report


12/07/2012 08:10 AST  KUNA

Credit growth continues to display signs of improvement compared to last year, gaining 3.9 percent year-on-year (y/y), a significant rise from the -0.4 percent (y/y) growth observed during the same period in 2011, a specialized report said on Wednesday.

The report, prepared by the National Bank of Kuwait (NBK) said both money supply (M1) and its broader measure (M2) were up in May, posting gains of 3.4 percent (KD 247 million) and 1.6 percent (KD 448 million), respectively, as liquid assets experienced a healthy jump.

It added that growth in outstanding credit picked up again in May following a slowdown in April. Loans rose by a healthy KD 128 million, making up for a flat month in April.

Personal facilities (excluding loans for the purchase of securities) continued to be a key driver of credit growth, rising a strong KD 83 million month-on-month (m/m) in May, it said, however, this month also saw some decent gains outside of the consumer sector.

Other gainers included trade (+KD 42 million) and real estate (+KD 26 million). Construction, on the other hand, saw the largest drop in outstanding credit (-KD 67 million), a development worth keeping a close eye on in the upcoming months, it said.

The report added that credit extended to non-bank financial institutions remained a drain on growth in credit, falling by KD 18 million (m/m) in May. Credit to this sector has subtracted KD 228 million year-to-date (ytd) or 9.6 percent.

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