Kuwait Central Bank: Local Banks Can Distribute Cash Dividends for 2020

Business

January 24th, 9:48am

Kuwait - Asharq Al-Awsat

The Kuwait Central Bank towers are pictured over the traditional Dhow harbor. (Reuters.)

The Central Bank of Kuwait (CBK) said that local banks can distribute cash dividends to their shareholders in proportion to their business results and net profit achieved in 2020, in light of the strength of their financial statements. Kuwaiti banks have demonstrated strength and durability with their levels of capital adequacy and have not used capital precautionary blockers in 2020, CBK explained in a statement. The Kuwait Banking Association said in June that there would be no distribution of dividends to shareholders for 2020. The decision was taken to enable the banking sector to operate normally and ensure liquidity “until current extraordinary circumstances created by the coronavirus pandemic end.” The National Bank of Kuwait (NBK) recently revealed that the new government will have tough decisions to make in regards to reforms given the estimated deficit for the fiscal year, the drop in oil prices and the increased spending amid the pandemic. NBK added that the deficit was estimated at KWD1.9 billion during the H1 of the fiscal year from April to September 2020. Liquid assets in the General Reserve Fund reached KWD1 billion. The fund is used to fill the deficit and it could cover the government’s funding for two months. However, the reforms are also hinged on the relation between the government and the National Assembly. NBK added that while the possibility of providing additional liquid funds is being weighed, it seems there is no alternative to passing the public debt law. Yet, the increase of debt should not be at the expense of serious financial reforms, the bank added.

from Asharq AL-awsat https://english.aawsat.com/home/article/2761591/kuwait-central-bank-local-banks-can-distribute-cash-dividends-2020