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Kuwait banking sector releases financial reports for Q1

Kuwait banks Covid-19_IFM_Image
The banking sector has been able to overcome the effects of Covid-19 because of the 43 measures taken by the Central bank of Kuwait

The Kuwaiti bank sector has announced its financial reports for the first quarter of 2021, and it shows that the sectors have been able to overcome the effects of Covid-19. This result has been possible after the 43 measures that the Central Bank of Kuwait has taken, since the pandemic hit in April 2020. These measures have also been praised by the International Monetary Fund (IMF) and global credit rating agencies. The key measures were primarily covered in four more areas like monetary policy, regulatory and prudential policy, financial stability, and social responsibility. In March 2020, CBK lowered the discount rate to1.5 percent along with reducing the interest rate on repo agreements by one percent.

The second measure came into place in October 2020, where the intervention rates on all interest rate structures were reduced to 0.125 percent for 10 years, including the term deposit acceptance system, direct intervention instruments, and public debt instruments. Additionally, in March 2020, banks did not submit financial statements for the first quarter of that year. But in April 2020, the banks were allowed to use 2.5 percent hedging capital buffers.

Other measures taken by the bank included reducing the risk weight of exposures on small and medium enterprises (SMEs) to 25 percent instead of 75 percent, increasing the amount of maximum available funding to 100 percent, lowering the minimum liquidity coverage standard and stable net financial standard, and lowering the minimum regulatory liquidity ratio.

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