Kuwait Commercial Banking Report Q3 2012
Business Monitor International, June 2012, Pages: 75
The Kuwait Commercial Banking Report provides industry professionals and strategists, corporate analysts, banking associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on Kuwait's commercial banking industry.
Since Q108, we have described numerically the banking business environment for each of the countries surveyed by BMI. We do this through our Commercial Banking Business Environment Rating (CBBER), a measure that ensures we capture the latest quantitative information available.
It also ensures consistency across all countries and between the inputs to the CBBER and the Insurance Business Environment Rating, which is likewise now a feature of our insurance reports. Like the Business Environment Ratings calculated by BMI for all the other industries on which it reports, the CBBER takes into account the limits of potential returns and the risks to the realisation of those returns. It is weighted 70% to the former and 30% to the latter. The evaluation of the ‘Limits of potential returns’ includes market elements that are specific to the banking industry of the country in question and elements that relate to that country in general. Within the 70% of the CBBER that takes into account the ‘Limits of potential returns’, the market elements have a 60% weighting and the country elements have a 40% weighting.
The evaluation of the ‘Risks to realisation of returns’ also includes banking elements and country elements (specifically, BMI’s assessment of long-term country risk). However, within the 30% of the CBBER that take into account the risks, these elements are weighted 40% and 60%, respectively. Further details on how we calculate the CBBER are provided at the end of this report. In general, though, three aspects need to be borne in mind in interpreting the CBBERs. The first is that the market elements of the ‘Limits of potential returns’ are by far the most heavily weighted of the four elements. They account for 60% of 70% (or 42%) of the overall CBBER. Second, if the market elements are significantly higher than the country elements of the ‘Limits of potential returns’, it usually implies that the banking sector is (very) large and/or developed relative to the general wealth, stability and financial infrastructure in the country.
Conversely, if the market elements are significantly lower than the country elements, it usually means that the banking sector is small and/or underdeveloped relative to the general wealth, stability and financial infrastructure in the country. Third, within the ‘Risks to the realisation of returns’ category, the market elements (ie: how regulations affect the development of the sector, how regulations affect competition within it, and Moody’s Investor Services’ ratings for local currency deposits) can be markedly different from BMI’s long-term risk rating.
Executive Summary 5
Table: Levels (KWDbn) 5
Table: Levels (US$bn) 5
Table: Levels At March 2012 5
Table: Annual Growth Rate Projections 2012-2016 (%) 6
Table: Ranking Out Of 59 Countries Reviewed In 2011 6
Table: Projected Levels (KWDbn) 6
Table: Projected Levels (US$bn) 6
SWOT Analysis 7
Kuwait Commercial Banking SWOT 7
Kuwait Political SWOT 8
Kuwait Economic SWOT 9
Kuwait Business Environment SWOT 10
Business Environment Outlook 11
Commercial Banking Business Environment Rating 11
Table: Commercial Banking Business Environment Ratings 11
Table: Middle East and Africa Commercial Banking Business Environment Ratings 13
Global Commercial Banking Outlook 14
Regional Outlooks 22
Banking Sectors: Four-Tier Landscape 22
Islamic Finance: Into The Frontier 27
Regional Banking Sector Outlook 34
MEA Banking Sector Forecast Overview 34
Table: Banks' Bond Portfolios 2011 34
Table: Middle East and Africa Commercial Banking Business Environment Ratings 35
Table: Comparison of Loan/Deposit & Loan/Asset & Loan/GDP ratios 36
Table: Anticipated Developments in 2012 37
Table: Comparison of Total Assets & Client Loans & Client Deposits (US$bn) 38
Table: Comparison of US$ Per Capita Deposits (2011) 39
Table: Interbank Rates and Bond Yields 40
Kuwait Specific Banking Sector Outlook 41
Banking Sector: Turning A Corner? 41
Economic Outlook 45
Table: Kuwait – Economic Activity, 2011-2016 48
Competitive Landscape 49
Market Structure 49
Protagonists 49
Table: Protagonists In Kuwait's Commercial Banking Sector 49
Definition Of The Commercial Banking Universe 49
List Of Banks 50
Table: Conventional Banks In Kuwait 50
Table: Islamic Banks In Kuwait 50
Company Profiles 51
Commercial Bank of Kuwait 51
Table: Stock Market Indicators 52
Table: Balance Sheet (KWDmn, unless stated) 52
Table: Balance Sheet (US$mn, unless stated) 53
Table: Key Ratios (%) 53
Industrial Bank of Kuwait 54
Table: Key Statistics For Industrial Bank of Kuwait, 2006-2008 (KWDmn) 55
National Bank of Kuwait 56
Table: Stock Market Indicators 57
Table: Balance Sheet (KWDmn) 58
Table: Balance Sheet (US$mn) 58
Table: Key Ratios (%) 58
Gulf Bank 59
Table: Stock Market Indicators 60
Table: Balance Sheet (KWDmn) 60
Table: Balance Sheet (US$mn) 61
Table: Key Ratios (%) 61
Commercial Bank of Kuwait 62
Table: Stock Market Indicators 63
Table: Balance Sheet (KWDmn) 63
Table: Balance Sheet (US$mn) 63
Table: Key Ratios (%) 64
Al-Ahli Bank of Kuwait 65
Table: Stock Market Indicators 66
Table: Balance Sheet (KWDmn) 66
Table: Balance Sheet (US$mn) 67
Table: Key Ratios (%) 67
Burgan Bank 68
Table: Stock Market Indicators 69
Table: Balance Sheet (KWDmn) 69
Table: Balance Sheet (US$mn) 70
Table: Key Ratios (%) 70
BMI Banking Sector Methodology 71
Table: Commercial Banking Business Environment Indicators And Rationale 73
Table: Weighting Of Indicators 74
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