Kuwait CBK Chief Sees Credit Constrained by Low Demand

(Corrects loan growth in August in last paragraph of story first published on Nov. 27.)

Commercial Bank of Kuwait said it expects local credit growth to remain constrained on reduced company demand, its chief executive said.

“A lot of companies have excess capacity already and therefore they will use their existing credit lines,” Nuhad Saliba, the bank’s chief executive officer, said in an interview in Kuwait City on Nov. 26.

Borrowing by the private sector in OPEC’s third-biggest producer increased at the slowest pace in at least 17 years in 2011 as political wrangling deterred a $110 billion state development plan. The central bank on Oct. 4 cut the key interest rate by 50 basis points to 2 percent to spur growth.

Loan growth to private businesses and consumers was 5.5 percent in August, according to central bank data. It will be between 5 percent and 6 percent next year “at best,” Saliba said.

To contact the reporter on this story: Dahlia Kholaif in Kuwait at dkholaif@bloomberg.net

To contact the editor responsible for this story: Shaji Mathew at shajimathew@bloomberg.net

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