Moody's: Kuwait banks strong, yet challenged

Kuwait's banking system is one of the most robust in the Gulf region, benefiting from the country's outstanding economic performance in recent years and its effective supervisory framework, Moody's Investors Service said in a new report.

The framework - despite some drawbacks - has been very successful in restoring confidence in the system since liberation and nurturing its development, the agency said.

However, despite the recent economic growth, Kuwaiti banks face some challenges relating to the operating environment due to the country's relatively undiversified economy, in which oil-related activities generate half of GDP, Moody's said.

This lack of diversity results in Kuwaiti banks having limited non-oil related exposures and sizeable balance-sheet concentrations, both to the oil sector and to individual entities, the agency said.

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