Kuwait banks don’t plan to withdraw Qatar deposits: official source

FILE PHOTO: A fishing boat passes in front of the Kuwait City skyline

By Ahmed Hagagy

DUBAI (Reuters) – Kuwaiti banks have no intention of withdrawing their deposits and investments from Qatar, a Kuwaiti official source told Reuters on Sunday.

The source, speaking on condition of unanimity because of political sensitivities, noted that Kuwaiti banks had not announced plans to withdraw deposits or take other exceptional measures when detailing their exposure to Qatar in bourse statements over the last few days.

“This reflects the confidence of Kuwaiti banks and Kuwaiti companies in the financial solvency of the state of Qatar, the Qatari banks and financial institutions and their ability to meet their obligations,” the source said.

“This confidence is confirmed by the international rating institutions. These investments are generating good returns for Kuwaiti banks. There is no reason to worry about them at the moment.”

Among the statements by Kuwaiti banks, Burgan Bank <BURG.KW>, for example, said its total exposure to Qatar was 66.7 million dinars ($220 million), or 0.9 percent of the bank’s total assets.

Saudi Arabia, the United Arab Emirates, Bahrain and Egypt cut diplomatic and trade ties with Qatar on June 5, accusing it of supporting terrorism. A deadline for Doha to comply with their demands was expected to expire late on Sunday with no sign of the crisis ending.

The four Arab states have warned they may impose further sanctions against Qatar. They did not give details but bankers believe, for example, that governments may ask their banks to pull deposits from Qatar.

Kuwait has not sided with the coalition against Qatar and has instead tried to mediate between the two sides.

(Editing by Andrew Torchia)