Y-o-Y loan growth at 7.6% Y-o-Y: System loans increased by 7.6% Y-o-Y in January 2016. This is slightly lower than the 8% Y-o-Y growth of December 2015 (and total loans fell 0.4% M-o-M), but this was an exceptionally strong month. Average growth in loans during 2015 ranged from 5% to 6.5% Y-o-Y. The improvement in credit growth comes on the back of stronger growth in both the corporate segment, up 6.3% Y-o-Y, and the retail segment, up 11% Y-o-Y. We factor in a slight improvement in loan growth in Kuwait this year to 8-9%, as a result of increased capital expenditure by the government. We believe NBK is the best way to play a recovery in loan growth in Kuwait. Low single-digit growth in deposits: Total deposits increased by 2.7% Y-o-Y in January, with growth unchanged compared to December 2015. Y-o-Y growth in deposits has been at low single digits over the past 12 months. The contribution of government deposits to total deposit has been however steady at 15%. The loan-to-deposit ratio has increased to 85.9% in January, compared to 85.6% in December 2015 and 81.4% in December 2014. The increase has been more moderate than in other GCC countries and funding costs have been stable for Kuwait banks under coverage during 2015.   Credit quality has improved in 2015; cost of risk continues to be driven by precautionary provisions: NPL ratios declined slightly on average for Kuwait banks during 2015, but for most, the cost of risk was above 100bps, with a large share of loan loss provisioning charges being precautionary provisions requested by the central bank. Our base case is that these type of provisions will be unchanged in 2016 compared to last year. (Central Bank of Kuwait, Elena Sanchez-Cabezudo, Rajae Aadel) National Bank of Kuwait: KWD0.70 as of 24 March 2016, Rating: Buy, FV: KWD0.87 per share, MCap: USD11,759 million, NBK KK / NBKK.KW