Moody's: Concerns for Kuwait banks

The fundamental credit outlook for the Kuwaiti banking system is stable to negative.

This reflects the good operating environment and the sector's good financial fundamentals, Moody's said.

But it also considers the banks' high exposure to the weakening domestic real estate market, some earnings quality concerns, indirect exposure to local equity markets and tightening conditions on international credit markets, the agency said.

The operating environment for Kuwaiti banks remains strong thanks to high oil prices in the booming local and regional economies, Moody's said. This, together with healthy net interest margins and excellent cost efficiency, results in superior profitability, the agency added.

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