Competition intensifies as Kuwait bankers eye additional ‘high-cost’ deposits

Competition intensifies as Kuwait bankers eye additional ‘high-cost’ deposits

Local banks have finally started a new round to attract an additional amount of high-cost deposits, however, to upset the balance of competition for deposits, especially government deposits, which confirms that 2022 will close at unusual historical interest rates locally for about 14 years, reports Al-Rai daily.

In this regard, the daily learned that one of the traditional banks recently won a deposit offered by a government agency for a year at a price of approximately 6 percent, specifically 5.77 percent, while the second highest price came from another agency operating in accordance with Islamic law at 5.65 percent, while it recorded the lowest rate at 4.125 percent.

What is worth noting in this regard is that the price of lending to individuals after the recent increase in the discount rate is 6.5 percent, which means that the margin between loans and the winning price is very narrow, and may not cover the operational cost. The data shows that 10 local banks competed for the government deposit, including a branch of a foreign bank operating in Kuwait, while two Kuwaiti banks, one traditional and the other operating according to Islamic law, were absent from participation.

Seven of the competing banks offered prices that