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Asset Growth – Slower yet steady…
The total assets of the banking sector stood at KD38.9bn at end of October 2008, a growth of 9.3%YTD as against a massive 25.9% exhibited by the banking sector in 10M2007. Assets in the current year have been driven almost single-handedly by claims on the private sector or to be more specific by the credit disbursement to residents along with some contribution from the foreign assets. This is somewhat different from the growth pattern witnessed last year where factors for asset growth were more widespread with less (though still significant) contribution by credit disbursement.
The average monthly growth of total assets in the 10 months of 2008 stood at 1.1%, much lower than the 2.3% in 2007 and 1.9% in 2006, portraying the CBK’s stance on curtailing inflation through limiting asset growth in banks. Similarly, lending’s to residents which form approximately 60% of total assets (up from 56% in October 2007) exhibited a healthy but lower growth of 15.3%YTD in October 2008 as compared to a 27% growth during the 10M2007. Average monthly growth for the 10M2008 period stood at a low 1.7% as against the average monthly growth of 2.5% portrayed by the banking sector in the full year 2007.