Citibank ending operations in Kuwait? October 15, 2008
Posted by mylastresort in analysis.Tags: banking, Bankruptcy, Banks, Citi, Citibank, economy, global, Rumor, Sub-prime, subprime, Systemic Risk, US
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CBK to buy Bank of Baghdad April 28, 2008
Posted by mylastresort in analysis.Tags: Banks, CBK, Commercial Bank of Kuwait, Expansion, Gulf Bank, Iraq, kuwait, Mergers and aquisitions, Syrian
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Commercial Bank of Kuwait (CBK) is in talks to buy a stake in an Iraqi lender and could finalize the acquisition this year.
“We are in negotiations to buy a stake from an investment company that owns a large stake”
- Abdul-Majeed al-Shatti, Chairman
Some quick facts:
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Iraq Holding Company (Kuwaiti Company) is planning on selling its 20% stake in Bank of Baghdad
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United Gulf Bank (Bahraini Company) is in talks to sell its stake in Bank of Baghdad
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CBK has been expanding in the region to avoid the over saturated Kuwaiti market
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CBK confirmed earlier this month that its in the final stages of buying 70% of Yemen Gulf Bank
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CBK plans to raise its stake in Syrian Islamic lender Cham Bank to 30% (from 10%)
KD 140,000 dilemma – Real Estate April 3, 2008
Posted by mylastresort in analysis.Tags: Banks, Central Bank, Companies, construction, Government, Ijara, kuwait, Land, Law, Parliament, Prices, Real Estate, Recent, Regulation
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The price of real estate in Kuwait had risen to ridiculous levels. Inflation in the country had risen to 6.7% in November ‘based on a 12.6% jump in housing’. A new law passed by Parliament prohibited banks and real estate companies from investing in residential real estate. Then a series of regulations passed by the central bank of Kuwait minimized the loans citizens could take to purchase homes. Real estate in Kuwait fell 20% – 40% in some areas.
Future of Kuwait’s banking sector March 31, 2008
Posted by mylastresort in analysis, rumors.Tags: Ahli, Bank of Kuwait, Banking Sector, Banks, Burgan, CBK, Central Bank of Kuwait, Commercial, economy, Effects of politics, Government, Industrial, inflation, kuwait, Kuwaiti, Loans, National
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The Central Bank of Kuwait’s recent steps in an effort to reduce the money supply and eventually lower inflation will have severe consequenses on the local banking sector. To recap the following steps were taken by the CBK:
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Consumer loans cap will be 40% of salary, from 50%
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Pensioners loans’ cap to 30% of income
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A new limit on interest rates of 3% over discount rate, from 4%
The banking sector in general relies heavily on lending funds to consumers at high rates at long term intervals. The loan cap on potential customers will decrease the amounts banks can lend and along with the limits on the interest rate charged will lower returns on the already decreased amounts taken. This step in itself will lower the revenues’ for the banking sector which will be evident in the 2009 statements. My prediction is that, based on the new regulations, banks’ revenues will be between 20 -25% lower than last year. (more…)
CBK lowers consumer loans cap March 25, 2008
Posted by mylastresort in analysis.Tags: Bad Debt, Bankingm Pension, Banks, Cap, Caps, Central Bank, Consumer Loans, Interest Rates, kuwait, Personal Loans
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The Central Bank of Kuwait announced it is reducing the cap on consumer loans to 40%, from 50%. The new rule will allow retail banks to lend upto 40% of a customer’s salary. Also introduced is a plan for pensioners’ loans cap at 30% of their income. The Central Bank also decided that it will limit interest rates to 3% above discount rate, rather than 4%. These steps are aimed at reducing the money supply in the market. It is believed that these steps are in an attempt to lower inflation in Kuwait, which is at record highs.
The new Central Bank decisions will effect retail banks by decreasing the amounts that could be lent to consumers while lowering returns on the loans given. The impact of the new regulations on the local banks will be decreased profits in the future and, along with the lawsuits, maybe even losses before end of year.
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Consumer loans cap will be 40% of salary, from 50%
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Pensioners loans’ cap to 30% of income
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A new limit on interest rates of 3% over discount rate, from 4%
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Kuwaiti’s owe more than KD 4 billion in personal loans
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These rules do not apply to foreign banks
Kuwait welcomes a Al-Rajhi bank March 25, 2008
Posted by mylastresort in saudi arabia.Tags: Al-Rajhi Bank, banking, Banks, Central Bank, FDI, First Saudi Bank, Foreign banks, investment, Islamic bank, kuwait, Kuwaiti, Number of, Sharia Compliant, total number of banks in
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The Central Bank of Kuwait (CBK) announced that it had granted Al-Rajhi Bank an initial license to open a single branch in the state.
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Al-Rajhi is Saudi Arabia’s leading bank
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First Saudi bank to open in Kuwait
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Operates under sharia law
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Fourth Gulf bank to obtain a permit in Kuwait
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Seventh foreign bank to obtain a permit
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Sixteenth bank to open in Kuwait
Islamic banking rising in Kuwait March 17, 2008
Posted by mylastresort in analysis.Tags: banking, Banks, Biased, Errors, Islamic Banking, kuwait, Kuwait Finance House, Kuwaiti, Middle East, Regulations, stock markets, Study Reasearch
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A study published by some local Kuwaiti newspapers was conducted on the widespread popularity of Islamic banking in the Kuwaiti economy. I could not find the name of the author or company which conducted the study. The study claims that 65% of all transactions, in Kuwait, are now done according to Islamic regulations. The study claimd that deposits in Islamic banks rank better than conventional, and ranked them “first,” although the guidelines for rating were not clear it used Kuwait Finance House as a citation.
The study also stipulates that citizens and expatriates have started investing into transportation, communication and even in the hospitality industry that abide by Islamic laws. Although the study doesnt reflect whether it is correlated with Islamic beleifs or whether the industry itself is growing.
The methods of conducting the study were not clear.
Kuwaiti Dinar at record high March 17, 2008
Posted by mylastresort in analysis, bahrain, qatar, saudi arabia.Tags: bahrain, Banks, BHD, Central Bank, Crisis, Depegging, Dinar, Dinar Peg, Dirham, economy, inflation, kuwait, KWD, oman, QAR, qatar, Record, Revaluation, Riyal, SAR, saudi arabia, Trading, United Arab Emirates, USD
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The Kuwaiti Dinar is at a record high against the Dollar. Kuwait let its Dinar sharply rise for the third trading session to a record high of .26600 fils (or $3.7594). The US Dollar plunged accross the board Monday on concerns that the financial crisis in the US will continue to deepen.
The Kuwaiti Dinar has gained 2% since Wednesday
The cumulative gain on the currency is now at 8.70% (expected to hit 15%). The forces on Gulf Arab states to revalue their currencies and drop their Dollar pegs is even more higher. The pressure on Saudi Arabia, United Arab Emirates, Qatar & Bahrain is even greater as the US Dollar reaches record lows and their own economies surging on record level oil prices fuelling sharp inflation.
Citibank filing bankruptcy? March 13, 2008
Posted by mylastresort in rumors.Tags: banking, Bankruptcy, Banks, Citi, Citibank, economy, global, Rumor, Sub-prime, subprime, Systemic Risk, US
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Rumors in the market that Citibank will be filing for bankruptcy in the coming days… The Federal Reserve will not allow this, due to many factors but, mainly due to systemic risk, in banking a high correlation and clustering of bank failures in a single country due to the collapse a single bank. This type of collapse would expand globally due to the interconnectedness of the banking system.
T. Rowe Price sees value in Gulf, Africa stocks March 9, 2008
Posted by mylastresort in analysis, qatar, saudi arabia.Tags: Africa, Africa & Middle East, analysis, Asset Management, Banks, Gulf, Researched, stock markets, T. Rowe Price
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Asset Management Firm, T. Rowe Price released a report stating that Middle Eastern stocks, despite their huge surge last year, remain undervalued with the region’s banks, financials and infrastructure firms an especially attractive bet.
T. Rowe Price launched an Africa & Middle East Fund last September with $570m under management, making it one of many companies looking to boost its exposure to the oil and commodity-rich region. Joseph Rohm, an analyst dedicated to the fund, said the majority of its 30 to 40 stocks were in the Middle East and most of those were financials. He said expected currency revaluations, growing infrastructure spending and China’s growing presence in Africa provides scope for future gains.”We feel that valuation gives a lot of support … We still think of this region as massively undervalued and less volatile than other markets going forward. That will be a big support.”
