Moody’s Investors Service recently stated that the National Bank of Kuwait (NBK) has improved the strength of its capital base and supported additional business growth, maintaining its position as an important financier for several projects in the area.
The service stated that this growth is attributed to the board of directors, which chose to raise the capital of NBK by 6.5 percent. This change is considered positive because it heightens the capital adequacy ratios for Central Bank of Kuwait’s Basel III capital requirements. These requirements are expected to be implemented at the end of this year.
Moody’s most recent credit outlook report emphasizes that NBK’s capital increase provides the local economy and business growth in Kuwait with even more support. This is important because the government has continued to develop projects for the five-year plan of improving the private sector, even though there are lower revenues for hydrocarbon.
NBK is the biggest financial institution in Kuwait; it is also one of the most important financiers for projects. The latest increase will require that NBK issue 344 million shares at the rate of 400 fils per share to current shareholders. This aligns with the earlier approval that NBK gained for increasing the bank’s current authorized capital.