Chief Executive Officer of the National Bank of Kuwait (NBK) Ibrahim S. Dabdoub said Wednesday the slump of the asset value affects negatively the capital market and brings pressures on the loan portfolios of local banks. "Kuwaits local loan portfolio, amounting to 24 billion US dollars, includes $15 billion worth loans for mortgages (in the form of stocks or real property), " Dabdoub said in an exclusive interview with CNBC Arabic TV channel in Kuwait. The heavily?circulated reports about Zain Telecom deal drew much attention of the local and regional investors because it came at a time when there is no good news on the outlook of the financial market. "If finalized, the deal will raise the ceiling of investor expectations and revive the market," Dabdoub believes. "The market is in need of aggressive initiatives to pump more liquidity and increase the public spending," he said, urging the government to turn to investing in the local market. As for the possible capitalization move by the NBK Group, he said the bank has yet to decide on raising its capital. A decision could be made in the near future, he pointed out. Dabdoub added that he believes that all local banks need to increase their capital in the coming period in order to meet the targets of their respective expansion plans.

In its recent meeting, the G20 urged all banks to increase their capital, deeming the move crucial under the current circumstances, he noted. The NBK is likely to do so in a bit to maintain its solvency rate at 14 percent which is well above the 12 percent specified by the Central Bank of Kuwait and the eight percent international rate, he went on to say. "This high rate of capital efficiency enabled the bank to overcome the ramifications of the international financial meltdown and entitled it to be ranked as top bank in the Middle East," Dabdoub underscored. The expansion strategy of the bank focuses on tapping the investment opportunities in the Gulf region. The recently announced financial results of the bank proved the soundness of its policies which stood the test of the recent financial crisis, he added. The NBK capital amounts to more than 1.7 billion Kuwaiti dinars.