【出版时间及名称】：2009年12月科威特银行业研究报告
        【作者】：CAPITAL证券
        【文件格式】：PDF
        【页数】：66
        【目录或简介】：
Waiting for the dust to settle…
Kuwait is the third largest GCC banking sector in terms of assets. Determined
in large part by the rise and fall of oil prices, it appears the budget surplus is
back on track. With significant exposures to real-estate, construction and
personal securities purchase, the banks’ lending portfolios have recently
suffered and provisions intensified. Furthermore, problems in the Kuwaiti
Banking Sector cannot simply be solved by the country’s inherent wealth.
Political deadlock exists in some quarters, hindering the effective
implementation of a state-sponsored stimulus package. Against this
backdrop, we anticipate slow balance sheet and earnings growth in 2009 and
2010, with a pick up thereafter. We initiate coverage on Kuwait with BUY
recommendations for Burgan Bank and NBK, and a SELL recommendation for
CBK. All of these three recommendations carry Moderate Risk ratings. Burgan
is our top pick, based on its higher upside to Target Price and LTFV, cheaper
2010 multiples, and it having the lowest NPLs ratio in our coverage. Since
privatization, Burgan has experienced a comprehensive revamp and, in 2004,
underwent a management reshuffle. The bank currently pursues an
aggressive external expansion plan through the realigning of KIPCO’s
commercial banking assets under Burgan Bank. Though we also believe NBK
will perform resiliently, with decent RoAE, we expect it to have a lower upside
potential to TP. In contrast, we are less confident regarding the prospects of
CBK. Indeed, this is forecast to be the most negatively-impacted of our three
Kuwaiti banks, with a high NPLs ratio exerting pressure on provisioning
charges, before rebounding in 2011.
Fast economy on strong hydrocarbons sector: In terms of real GDP growth,
the Kuwaiti economy ranked amongst the fastest growing amongst developing
economies, reaching c.10% in the past 5 years. Oil exports – forming c.55% of GDP
– generated unprecedented returns in the last half decade, before falling on the back
of the global financial crises towards the end of 2008. Recently however, the uptrend
in oil prices has returned. The IMF expects real GDP growth to contract by 1.5% in
2009, and grow by 3.3% in 2010.
Accumulated wealth & likely budget surplus: The conservative budget of
2009/10 – based as it is on USD35/barrel – makes a fiscal surplus more achievable,
especially with the recent rebound in oil prices and 1H08/09’s existing surplus.
Furthermore, sovereign wealth funds (including the RFFG and SGRF) have
accumulated wealth of over USD250bn.
Political deadlock hindering recovery: Despite an approved stimulus package
of KWD1.5bn (c.USD5.2bn) and a guarantee of up to 50% of expected KWD4bn in
fresh loans to productive sectors; tangible results of such a policy remain elusive.
Concentrated assets, room for growth but strong appetite unlikely: 60% of
assets are concentrated within the largest 4 banks. Despite this, a loans/GDP ratio
of c.64% implies room for lending growth. However, due to current economic
conditions, the strong lending appetite of previous years is currently lower. This may
stem from the sector’s larger exposure to the troubled real-estate and construction
sectors, c.32.4% of total loans in 2008/09, as well as 11.5% for personal purchases
of securities which had also been hit by the stock market decline. Accordingly,
Kuwaiti banks have built-up their provisioning base in the last 3 quarters.
CBoK slashes rates to boost lending growth: To stimulate lending, The
Central Bank of Kuwait (CBoK) cut lending rates by 250bps in 2008 and another
75bps until May 2009. This resulted in margin pressures for Kuwaiti banks with the
decline asset yields that followed CBoK cuts. Together with heavy provisioning, the
banking system was slower yet still profitable in 2008. Meanwhile, 9M09 showed
c.63% lower aggregate YoY profits.