Mubasher: The outlook for the Kuwaiti banking system is stable as the credit standing of the country’s banks will be supported by steady non-oil economic growth and solid financial fundamentals over the next 12 to 18 months, according to a recent report by Moody's Investors Service.

Moody's forecasts non-oil GDP growth in Kuwait to register 3.5% in 2018 and 4.0% in 2019 driven by growing government spending, while annual domestic credit growth is expected to be around 6% over the next 12 to 18 months.

Bank profitability will improve on wider net interest margins and lower credit costs.

“The ratio of net income to tangible assets will increase to around 1.3% over our outlook period, from 1.1% in 2017,” the report stated.

However, banks in Kuwait are facing the risks of adverse domestic political and geopolitical developments or renewed weakness in oil prices, the ratings agency noted.