Kuwaiti Exchange Companies Report Declining Profits in Q1 2024
KUWAIT CITY: Local exchange companies in Kuwait witnessed a significant drop in profits during the first quarter (Q1) of 2024, according to data released by the Central Bank of Kuwait.
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Profits plunged by a staggering 56%, totaling 5.88 million dinars, compared to 10.5 million dinars recorded in Q1 of 2023. This decline is primarily attributed to rising expenses, including administrative costs, bank interest, and allocations.
Overall revenue for the 32 exchange companies under the Central Bank’s supervision also saw a slight decrease of 1.4%. It reached 26.59 million dinars in Q1 2024, compared to 26.97 million dinars in the same period last year.
While there was a positive trend in revenue from currency sales, which rose by 1.01% to 19.98 million dinars, other revenue streams took a hit. Bank interest revenue increased from 255.2 thousand dinars to 339.2 thousand dinars, but other revenues dropped by a substantial 9.6%, amounting to 6.26 million dinars.
On the flip side, total expenses for exchange companies surged by 33.44%, reaching 21.9 million dinars in the first quarter of 2024. This increase is driven by significant rises in administrative and banking expenses, along with higher bank interest and allocations. Notably, other expenses saw a decrease of 67.65% during the same period.
The significant fluctuations in profits and expenses highlight the challenges currently faced by Kuwaiti exchange companies. These findings underscore the need for the sector to implement effective financial management strategies to navigate these difficulties.
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