Financial Outlook of the OIC Member Countries

Transkript

Standing Committee
for Economic and Commercial Cooperation
of the Organization of Islamic Cooperation (COMCEC)
FINANCIAL OUTLOOK OF THE OIC MEMBER
COUNTRIES 2014
COMCEC COORDINATION OFFICE
September 2014
Standing Committee
for Economic and Commercial Cooperation
of the Organization of Islamic Cooperation (COMCEC)
FINANCIAL OUTLOOK OF THE OIC MEMBER
COUNTRIES 2014
COMCEC COORDINATION OFFICE
September 2014
For further information please contact:
COMCEC Coordination Office
Necatibey Caddesi No: 110/A
06100 Yücetepe
Ankara/TURKEY
Phone: 90 312 294 57 10
Fax: 90 312 294 57 77
Web: www.comcec.org
PREFACE
The Standing Committee for Economic and Commercial Cooperation of the Organization of the
Islamic Cooperation (COMCEC) Financial Outlook is a contribution of the COMCEC
Coordination Office to enrich the discussions during the Finance Working Group Meetings
being held twice a year. Finance Working Group is established as part of the implementation of
the COMCEC Strategy. For developing a common language/understanding, and approximating
policies in financial cooperation to address and find solutions to the financial challenges of the
Islamic Ummah, the COMCEC Strategy envisages Financial Cooperation Working Group as one
of the implementation instruments of the Strategy. In this respect, Finance Working Group
Meetings aim to provide a regular platform for the member countries’ experts to elaborate
thoroughly financial cooperation issues and share their best practices and experiences.
COMCEC Financial Outlook 2014 is prepared by Mr. Ali ISLER, Mr. Fırat YILMAZ, Mr. Okan
POLAT, and Mr. UTKU ŞEN, with the objective of presenting a general outlook of the financial
system of the OIC Member States, highlighting the potential areas for cooperation in this sector
and as well as evaluating the recent developments in the global financial structure.
The views expressed and conclusions reached in this publication do not necessarily reflect the
official views of the COMCEC Coordination Office, COMCEC or the governments of the member
countries.
i
CONTENTS
PREFACE ...................................................................................................................................................................... i
CONTENTS................................................................................................................................................................. ii
TABLES ...................................................................................................................................................................... iii
ABBREVIATIONS .................................................................................................................................................... iv
INTRODUCTION .......................................................................................................................................................1
1.
RECENT DEVELOPMENTS IN THE GLOBAL FINANCIAL SYSTEM ...................................................3
2.
FINANCIAL OUTLOOK OF OIC MEMBER COUNTRIES ........................................................................6
2.1 FINANCIAL DEPTH ........................................................................................................................................9
2.2 FINANCIAL ACCESS ..................................................................................................................................... 12
2.3 FINANCIAL EFFICIENCY ............................................................................................................................ 16
2.4 FINANCIAL STABILITY ............................................................................................................................. 19
3.
FINANCIAL COOPERATION UNDER THE COMCEC ........................................................................... 23
3.1 THE COMCEC STRATEGY: FINANCIAL COOPERATION ................................................................... 23
3.1.1
REGULATORY AND SUPERVISIORY COOPERATION ..................................................................... 23
3.1.2
CAPITAL FLOWS......................................................................................................................................... 24
3.1.3
VISIBILITY OF FINANCIAL MARKETS ................................................................................................ 24
3.1.4
TRAINING, R&D ACTIVITIES AND STATISTICS ............................................................................... 27
3.2 IMPLEMENTATION OF THE STRATEGY .............................................................................................. 28
3.2.1
COMCEC FINANCIAL COOPERATION WORKING GROUP ............................................................ 28
3.2.2
PROJECT CYCLE MANAGEMENT (PCM) ............................................................................................ 29
3.3 ON-GOING ACTIVITIES UNDER THE COMCEC ................................................................................... 29
3.3.1
OIC MEMBER STATES STOCK EXCHANGES FORUM ..................................................................... 29
3.3.2
COMCEC CAPITAL MARKETS REGULATORS FORUM.................................................................... 30
3.3.3
COOPERATION AMONG THE CENTRAL BANKS AND MONETARY AUTHORITIES ............. 30
COUNCLISION ......................................................................................................................................................... 31
APPENDIX ............................................................................................................................................................... 33
DEFINITIONS OF SELECTED FINANCIAL BENCHMARKING DATA ....................................................... 43
REFERENCES .......................................................................................................................................................... 46
ii
FIGURES
Figure 1: Comparison of the Real GDP Growth Rates of Selected Country Groupings ............................... 4
Figure 2: Private Credit by Deposit Money Banks and Other Financial Institutions to GDP Ratios ... 10
Figure 3: Bank Deposits to GDP Ratios .......................................................................................................................... 10
Figure 4: Stock Market Capitalization to GDP Ratios ............................................................................................... 11
Figure 5: Stock Market Total Value Traded to GDP Ratios .................................................................................... 12
Figure 6: Bank Accounts per 1, 000 adults in OIC Member States ..................................................................... 13
Figure 7: Bank Branches per 100,000 Adults in OIC Member States ............................................................... 14
Figure 8: Adults with an Account at a Formal Financial Institution to Total Adults ................................. 15
Figure 9: Adults Saving at a Financial Institution in the Past Year to Total Adults .................................... 15
Figure 10: 5 Bank Asset Concentration Ratios in OIC Member States ............................................................. 16
Figure 11: Net Interest Margin in OIC Member States ............................................................................................ 17
Figure 12: Lending Deposit Spread in OIC Member States ................................................................................... 18
Figure 13: Non-Interest Income to Total Income Rates in OIC Member States ........................................... 18
Figure 14: Z-Scores in OIC Member States ................................................................................................................... 20
Figure 15: Non-Performing Loans in OIC Member States ..................................................................................... 21
Figure 16: Volatility of Stock Prices in OIC Member States .................................................................................. 22
Figure 17: Trends in Global Islamic Finance Assets (billion USD) ..................................................................... 25
Figure 18: Growth Rate of Global Islamic Finance Assets ..................................................................................... 25
Figure 19: Global Islamic Financial Assets: Geographical Breakdown, 2012 (US$ billions) ................ 26
TABLES
Table 1: Categorization of OIC Member States .............................................................................................................. 7
Table 2: Selected Financial Data on OIC Member States ........................................................................................... 8
Table 3: Selected Financial Data on LIG-OIC Member States (2009) ............................................................... 33
Table 4: Selected Financial Data on LMIG-OIC Member States (2009) ........................................................... 34
Table 5: Selected Financial Data on UMIG-OIC Member States (2009) ........................................................... 35
Table 6: Selected Financial Data on HIG-OIC Member States (2009) ............................................................... 36
Table 7: Selected Financial Data on LIG-OIC Member States (2010) ............................................................... 37
Table 8: Selected Financial Data on LMIG-OIC Member States (2010) ........................................................... 38
Table 9: Selected Financial Data on UMIG-OIC Member States (2010) ........................................................... 39
Table 10: Selected Financial Data on HIG-OIC Member States (2010) ............................................................ 39
Table 11: Selected Financial Data on LIG-OIC Member States (2011) ............................................................. 40
Table 12: Selected Financial Data on LMIG-OIC Member States (2011) ......................................................... 41
Table 13: Selected Financial Data on UMIG-OIC Member States (2011) ........................................................ 42
Table 14: Selected Financial Data on HIG-OIC Member States (2011) ............................................................ 42
iii
ABBREVIATIONS
COMCEC
Standing Committee for Economic and Commercial
Cooperation of the Organization of the Islamic Cooperation
GDP
Gross Domestic Product
IMF
International Monetary Fund
N.A
Not–Available
NIM
Net Interest Margin
NPL
Non-Performing Loans:
OIC-LIG
OIC-Low Income Group
OIC-LMIG
OIC-Lower Middle Income Group
OIC-UMIG
OIC-Upper Middle Income Group
OIC-HIGH
OIC-High Income Group
PCM
Project Cycle Management
OIC
Organization of the Islamic Cooperation
SESRIC
Statistical, Economic and Social Research and Training Centre
for Islamic Countries
iv
Financial Outlook of the OIC Member Countries 2014
INTRODUCTION
A financial system can be defined at the global, regional or firm specific level. The financial
system is critical to the functioning of all these levels as a whole. The firm's financial system is
the set of implemented procedures that track the financial activities of the company. On a
regional scale, the financial system is the system that enables lenders and borrowers as
partners to exchange funds. The global financial system is basically a broader regional system
that encompasses all financial institutions, borrowers and lenders within the global economy.1
As essential components of the system, banks, securities markets, pension and mutual funds,
insurers, market infrastructure, central banks, as well as regulatory and supervisory
authorities have a huge influence on financial system. These players have crucial roles in
channeling savings to investments efficiently, thereby supporting economic growth and
stability. Due to increasing connectivity among financial institutions, resilient financial systems
that are well-regulated and well-supervised are essential for both domestic and international
financial stability2.
In this sense, financial cooperation among relevant sides plays a crucial role in removing the
barriers on capital mobility, increasing financial literacy, managing financial risks, supervising
financial institutions, increasing product diversity, broadening and deepening financial
markets.
As a broad regional international organization, The COMCEC is one of the four standing
committees of the OIC which is responsible for enhancing economic and commercial
cooperation among the Member States. Since the commencement of its activities in 1984,
COMCEC has initiated many programs and projects towards improving financial cooperation
among the OIC Member States. In addition, the COMCEC Strategy identified financial
cooperation as one of the major cooperation areas of the COMCEC and envisaged the
establishment of the Financial Cooperation Working Group as an important instrument for
strengthening financial cooperation among member countries.
Furthermore, cooperation among the Stock Exchanges, Capital Market Regulators and Central
Banks and Monetary Authorities of the Member States are other crucial ongoing endeavours in
the field of financial cooperation under the COMCEC.
Highlighting the recent global financial developments, this Outlook mainly aims to present a
general outlook of the financial system of the OIC Member States.
This Outlook is comprised of three main sections:
1
2
http://www.investopedia.com/terms/f/financial-system.asp
Financial Systems Soundness Indicators 2013, IMF
1
The First Section briefly describes recent financial developments and their impact on the
global financial system for displaying the current comprehensive picture as possible as in this
field.
The Second Section gives a general overview of the financial system of the OIC Member States.
It outlines financial depth, financial access, financial efficiency and financial stability in
addition to the weaknesses and strengths of the OIC Member States according to selected
financial benchmarking data. In this Outlook, the OIC Member States are classified according to
their income levels.
The Third Section underlines the cooperation efforts under the COMCEC Strategy and the ongoing activities under the COMCEC in this field.
The Appendix Section gives the details of all figures of each OIC Member States analyzed in the
second section.
2
1. RECENT DEVELOPMENTS IN THE GLOBAL FINANCIAL
SYSTEM
The global economy has continued to cope with the consequences of the financial crisis and a
new financial architecture has been built to achieve greater financial stability since the last
global financial crisis. The United States may soon end the quantitative easing program and the
World may move to a higher interest rate environment. Emerging markets have enjoyed
favourable capital inflows during the recent global recovery, yet they are likely to face more
volatile external conditions and higher risk premiums. Due to the changing financial and
macroeconomic environment, several emerging market economies are required to increase
their resilience. Under these circumstances, the financial sector growth is expected to be more
balanced and sustainable. The Financial sector in the European Union has been recovering
with the help of a stronger monetary union and a common framework for risk mitigation while
reducing excessive debt levels. Another significant economy, namely Japan, has been
implementing a new set of policy tools which includes aggressive monetary easing, supported
with fiscal and structural reforms. Consequently, the global financial system has been adapting
to more strict and sound regulations and undergoing a number of challenging transitions on
the path to greater stability. These transitions have not been completed yet and stability
conditions of the global financial system have not been functioning normally. A number of
effective policies are necessary for a successful shift from liquidity-driven to growth-driven
markets in advanced and emerging market economies. 3
Nonstop quantitative easing, buoyancy in United States economic market prospects and
persistent low yields in line with low volatility were three key expectations that had driven
asset prices to high levels until May 2013. However, before the end of 2013, the FED started
tapering of asset purchase program in line with the improvements in the United States
economy and planned to end quantitative easing program in 2015. Consequently, emerging
markets encountered serious capital outflows for the first time since the beginning of the
global crisis in 2008, accompanied with a sluggish growth due to tightened global financial
conditions and structural bottlenecks in some economies. Market players have also been trying
to figure out the threats and opportunities of Japan’s aggressive set of quantitative and
qualitative monetary easing policies which resulted in greater volatility in previous months.4
In this adaptation process, there will be implications for all players in the financial sector.
Ending, in particular, the quantitative easing program by the US will give rise to new problems,
mainly the surge that is likely to occur in long-term interest rates. Nevertheless adapting to
this new environment may be tough since portfolio managers will have to adjust their
investment strategies in view of the new high interest rates and the more volatile
environment. Squeeze of liquidity in global markets, deleveraging current positions in short
term funding markets and decline in the shadow banking system including the mortgage
system are likely to exacerbate the effects of interest rate increases, and these can be
contagious across global markets. Emerging market economies will encounter financial
stability challenges. Bond investors are now more responsive to the changing interest rate
3 IMF, Global Financial Stability Report 2013,2014
4 IMF, Global Financial Stability Report 2013, 2014
3
environment which is mainly a result of the recent monetary policies of advanced economies.
In that sense, international coordination for policy reforms will be beneficial to avoid negative
financial and economic impacts of those spillovers.5
Although unprecedented macroeconomic policy responses were implemented by advanced
economies, uncertainties on the path to economic recovery still persist. The global economy
still struggles to handle the financial market fluctuations and macroeconomic imbalances
which increase vulnerabilities in global economic recovery and weaken employment
expectations. Real GDP growth rate for emerging and developing economies dropped from 6.3
percent in 2011 to 5.1 percent in 2012 and 4.7 percent in 2013. It is expected to increase to 4.9
percent in 2014. Furthermore, real GDP growth rates for advanced economies dropped from
1.7 percent in 2011, to 1.4 percent in 2012 and 1.3 percent in 2013. It is expected to increase
to 2.2 percent in 2014 due to the recovery policies of these countries. Similarly, world
economic growth decelerated from 3.2 percent in 2012 to 3 percent in 2013. It is expected to
increase to 3.6 percent in 2014 and then increase to 3.9 percent in 2015 mainly due to the high
performance of emerging economies. 6
Figure 1: Comparison of the Real GDP Growth Rates of Selected Country Groupings
8%
7%
6%
5%
4%
3%
2%
1%
0%
2010
2011
2012
2013
2014
2015
Advanced Economies
Emerging Market and Developing Economies
OIC
World
Source: Calculated by Using IMF Database
It is obvious that global economic growth outlook remains challenging, fragile and uncertain.
Capital markets do not function efficiently, unemployment problems continue globally and
5 IMF, Global Financial Stability Report 2013, 2014
6 IMF, World Economic Outlook 2014
4
debt crisis still persists as one of the serious problems in the global economy, especially in the
Euro Zone. In this process, advanced economies try to implement several structural policies to
recover their economies. Multiple reasons, such as volatility of capital flows, credit risk, asset
price bubbles and instability of commodity prices, particularly fluctuations in food prices,
hamper recovery of emerging and developing economies.7
Policy makers are still worried about the sluggish domestic consumption which is the main
factor of economic growth in the US Economy. They are, moreover, concerned about the weak
banking sector which limits credit supply and hampers the pace of economic recovery in
Europe. Emerging markets and developing countries have been adversely affected by the
relative slow growth and uncertainty in the advanced economies through trade and financial
channels which lead to domestic weaknesses.8
In this vein, current account imbalances of emerging markets decreased from 1.6 percent in
2011 to 0.7 percent in 2013. In particular, similarly current account deficits are estimated to
decline in some advanced economies such as France, Italy, Greece, Portugal, and Spain. These
economies, together, accounted for the majority of the world’s current account deficits before
the crisis. In contrast, the current account deficits in the United Kingdom, Canada, and
Australia became healthier in 2013. The United States recovered current account deficit level
in 2013 from -2.7 percent to -2.3 percent. During the same period, OIC countries, which are
mostly emerging economies, current account surpluses decreased from 6.2 percent to 3.9
percent.
Finally, geopolitical risks in Russia and Ukraine and Middle East particularly in Syria and Iraq
have so far had limited spillovers to global markets. The financial impact of these political
tensions has largely been confined to local markets. Spillovers have been modest so far due to
economic and financial linkages of most of the countries with particularly Russia and Ukraine
are limited outside the energy sector. Namely, local markets have been affected seriously like a
rise in local bond yields by the financial impact of these political tensions. 9
7 Islamic Development Bank, Annual Report
8 Islamic Development Bank, Annual Report
9 IMF, World Economic Outlook 2014
5
2. FINANCIAL OUTLOOK OF OIC MEMBER COUNTRIES
A country's financial system includes banks, securities markets, pension and mutual funds,
insurers, market infrastructures, central banks as well as regulatory and supervisory
authorities. These institutions and markets have outstanding roles in channeling savings to
investments efficiently in order to support economic growth. Problems in financial systems
cause to disrupt the effectiveness of monetary policy, exacerbate economic downturns, trigger
capital flight and make pressures on exchange rates, and create large fiscal costs related to
rescuing troubled financial institutions. Therefore, resilient financial systems that are wellregulated and well-supervised are essential for both domestic and international economic and
financial stability.10
In other words, a financial system is very significant for the whole economy. A well-functioning
financial system contributes to economic growth, development and poverty alleviation by
promoting investments, mobilizing savings, easing access to finance, increasing financial
literacy, reducing information, transaction and monitoring costs and allocating the resources
efficiently in the overall economy.
Since low income households are excluded from the financial system especially in developing
countries, they do not take part in the process of economic development as shown by several
studies11. In order for underprivileged people to benefit more from economic growth,
development of a sustainable financial system is required. Some empirical studies also prove
that an increase in the level of financial development results in a decrease in the level of
income inequality through sustainable economic growth, creating more jobs and well-designed
financial instruments.12
This outlook analyzes in particular the banking sector and security markets of OIC Member
States. It aims to shed light on recent financial trends and the development of financial
institutions and markets of OIC Member States.
In this Financial Outlook, OIC Member States have been categorized in four major groups
according to the World Bank Income Grouping Methodology (according to their GDP Per
Capita levels), which is globally used in current financial economic researches. According to
this categorization, 19 countries are in OIC-Low Income Group (OIC-LIG); 15 are in OIC Lower
Middle Income Group (OIC-LMIG); 16 are in OIC-Upper Middle Income Group (OIC-UMIG), and
7 are in OIC-High Income Group (OIC-HIGH) as shown in the table below:
Financial System Soundness Indicators 2013, IMF
11 Role of Microfinance in Poverty Alleviation 2008, Mohammed Obaidullah, IRTI
12 Global Financial Development Report 2013, The World Bank
10
6
Table 1: Categorization of OIC Member States
CATEGORIES
COUNTRIES
NUMBER OF
COUNTRIES
OIC-Low income group
US$ 1035 or less
Afghanistan, Bangladesh, Benin, Burkina Faso,
Chad, Comoros, The Gambia, Guinea, Guinea
Bissau, Kyrgyz Republic, Mali, Mozambique,
Niger, Sierra Leone, Somalia, Tajikistan, Togo,
Uganda
19
OIC-Lower middle
income group
US$ 1,036 to US$ 4,085
Cameroon, Côte d'Ivoire, Djibouti, Egypt,
Guyana, Indonesia, Mauritania, Morocco,
Nigeria, Pakistan, Senegal, Sudan, Syria,
Uzbekistan, Yemen
Albania, Algeria, Azerbaijan, Gabon, Islamic
Republic of Iran, Iraq, Jordan, Kazakhstan,
Lebanon, Libya, Malaysia, Maldives, Suriname,
Tunisia, Turkey, Turkmenistan
15
Bahrain, Brunei Darussalam, Kuwait, Oman,
Qatar, Saudi Arabia, United Arab Emirates
7
OIC-Upper middle
income
US$ 4,086 to US$12,615
OIC-High income group
US$ 12,616 or more
16
Source: World Bank
Several financial indicators13 were used within the four fields to measure how well financial
institutions and markets of OIC Member States perform:
(a) Financial Depth: Measures the size of financial institutions and markets,
(b) Financial Access: Measures the degree to which individuals can and do use financial
institutions and markets,
(c) Financial Efficiency: Measures the efficiency of financial institutions and markets in
providing financial services,
(d) Financial Stability: Measures the stability of financial institutions and markets in order to
measure and benchmark financial systems in the OIC region.
13
Benchmarking Financial Systems Around The World 2012, World Bank
7
Table 2: Selected Financial Data on OIC Member States
FINANCIAL INSTITUTION
FINANCIAL
MARKETS
Stock
Market
Capitalization
Stock Traded to
GDP
DEPTH
Private Sector Credit to GDP
Deposits to GDP
ACCESS
Account per Thousand Adults
Bank Branches per 100.000 adults
Adults with an Account at a Formal Financial
Institution to Total Adults %
Adults Saving at a Financial Institution in the
Past Year to Total Adults %
5 Bank Asset
Concentration
EFFICIENCY
Net Interest Margin
Lending Deposit Spread (%)
Non-interest Income to Total Income
Z-Score
Capital Adequacy Ratios
Non-Performing loans (%)
Stock
Market
Turnover Ratio
STABILITY
Volatility of Stock
Price
Source: World Bank
These four components, which are used to characterize and compare financial systems across
country groups, aim to give a general sense of the financial development of the OIC Member
States. Although sufficient indicators are used to measure the performance of financial
institutions of OIC Member States, inadequate data has led to the usage of few benchmarks to
evaluate the financial markets of OIC Member States. In this analysis, average figures of WHIGH (World-High Income Countries), W-UMIC (World-Upper Middle Income Countries) and
W-LIC (World-Low Income Countries) are used to compare with OIC income groups.
IMF and the World Bank databases have been widely used to prepare this outlook. It is clear
that available and accurate data is very important to conduct a research in the financial sector.
Lack of accurate data for OIC Member States was the main challenge to analyze financial
outlook of the OIC region. Information on key financial indicators is presented in the Appendix
Section for each OIC member state.
8
2.1 FINANCIAL DEPTH
A reasonable level of financial depth is one of the crucial prerequisites of financial
development. The deeper the financial institutions and markets, the more diversified and
sophisticated financial services are. The size of the financial institutions and financial players
measures the level of financial depth in a country or region. In a deep market, many actors
conduct a great deal of transactions (in a competitive and efficient market). As a result, higher
competitiveness; transparency, accountability and better risk management are facilitated.
Private credit to GDP and bank deposits to GDP ratios are used to measure the financial depth
of financial institutions in OIC Member States. Private credit extended by banks and financial
institutions to the real economy is a key to sustainable economic growth. It provides not only a
convenient environment for the real investment in the economy but also a more efficient use of
scarce resources in the financial sector. There is evidence that credit expansion has a positive
impact on the economic growth and financial depth.14 Therefore, private credit to GDP is one of
the significant indicators to measure financial depth. But, to what extent credit expansion has a
positive impact on overall economy is a matter of debate. Excessive credit expansion may
threaten the financial stability and end up with a credit boom. In this perspective, there are
considerable differences among OIC-LIG, OIC-LMIG, OIC-UMIG and OIC-HIGH country groups.
Some OIC Member States show a remarkable performance compared to others.
As shown in Figure 2 below, OIC-LIG and OIC-LMIG countries suffer from inadequate access to
credit more than high income group countries. Although, private credit to GDP ratios of OICHIGH countries were 72.4 in 2009, 64.4 percent in 2010 and 45.5 percent in 2011, the ratios of
OIC-LIG countries were only 13.6 percent, 14.9 percent and 16.1 percent for the same years
respectively. Furthermore, while private credit to GDP ratios of World Average was 41 percent
in 2009, 39 percent in 2010 and 37.6 percent in 2011, the ratios of OIC Average were 34.5
percent, 33.4 percent and 32 percent in 2009, 2010 and 2011 respectively. It can be also seen
from the graph that there is a huge gap between average rates of W-HIGH and OIC-HIGH
countries. This Figure also indicates that the lack of private credit opportunities for OIC-Lower
income groups is an important obstacle to increasing investment and growth compared to
World and OIC Average.
Bank deposits to GDP refers to the total value of demand, time and saving deposits at domestic
deposit money banks as a share of GDP. Commercial banks and other financial institutions that
accept transferable deposits, such as demand deposits are included in the deposit money
banks.15 Deposit levels are very important for stimulating investments, mobilizing savings,
easing access to finance in the financial system.
14
15
9
Figure 2: Private Credit by Deposit Money Banks and Other Financial Institutions to GDP
Ratios
100%
95%
90%
85%
80%
75%
70%
65%
60%
55%
50%
45%
40%
35%
30%
25%
20%
15%
10%
5%
0%
W-HIGH
W-UMIC
2009
2010
2011
W-LIC
OIC-LIG
OIC-LMIG
OIC-UMIG
OIC-HIGH
WORLD OIC Average
Average
Source: Calculated by Using World Bank Database
Figure 3: Bank Deposits to GDP Ratios
80%
W-HIGH
70%
60%
50%
W-UMIC
40%
2009
2010
30%
W-LIC
20%
2011
10%
0%
OIC-LIG
OIC-LMIG
OIC-UMIG
OIC-HIGH
WORLD OIC Average
Average
The Figure above shows that OIC-LIG and OIC-LMIG have very low levels of bank deposits
compared to OIC-UMIG and OIC-HIGH. In 2011, OIC-LIG countries recorded 23.3 percent bank
deposit ratio and OIC-LMIG countries recorded about 37.1 percent bank deposit ratio.
10
However, OIC-UMIG countries recorded 68.8 percent and HIGH countries recorded 45.5
percent bank deposits ratio in the same year. World Average for bank deposits ratio was about
44 percent during 2009-2011. OIC Average ratios were 43 percent, 42 percent and 42 percent
in 2009, 2010 and 2011 respectively. On the other hand, bank deposits ratios of OIC-HIGH
countries were 59.5 percent in 2009, 57.3 percent in 2010 and 45.5 percent in 2011 and
higher than World Average and OIC Average. Also, bank deposits to GDP ratio of W-HIGH
countries, which is approximately 80 percent, exceeds significantly OIC HIGH countries during
2009-2011. Namely, banking sectors in OIC-LIG and OIC-LMIG suffer from insufficient deposits
compared to other groups.
Stock market capitalization and stock traded to GDP ratios are used to analyze the financial
depth of financial markets in OIC Member States.
Stock markets consist of securities, public and corporate bonds, future and option contracts. It
is clear that a well-functioning stock market is also more attractive to foreign investors.
Figure 4: Stock Market Capitalization to GDP Ratios
80%
70%
60%
W-HIGH
50%
2009
40%
2010
30%
W-UMIC
W-LIC
20%
2011
10%
0%
OIC-LIG
OIC-LMIG
OIC-UMIG
OIC-HIGH
WORLD OIC Average
Average
Stock market capitalization to GDP ratio measures the strength of the security market in the
economy. The above Figure shows that OIC-LIG recorded 9.3 percent stock market
capitalization ratio in 2010 and OIC-LMIG recorded 26.7 percent in 2010. It can also be seen
from the Figure that average rates of stock market capitalization to GDP in even OIC-UMIG and
OIC HIGH countries which were 64.9 percent and 65.6 percent respectively in 2010 exceeded
average of W-HIGH and W-UMIC rates. In other words, this Figure indicates the need for
market capitalization of OIC-LIG and OIC-LMIG compared to other groups and average figures.
11
Figure 5: Stock Market Total Value Traded to GDP Ratios
60%
50%
40%
2009
30%
2010
20%
W-HIGH
2011
10%
W-UMIC
W-LIC
0%
OIC-LIG
OIC-LMIG
OIC-UMIG
OIC-HIGH
WORLD OIC Average
Average
Stock market total value traded ratio which includes information on the size and activity of the
stock market means total value of all listed shares in a stock market as a percentage of GDP.16
The above Figure shows that stock market traded ratios are very low in OIC-LIG countries
compared to other OIC groups and World Average. Stock market total value traded ratio of
OIC-LIG was 5.1 percent in 2009 and 2010 and it increased to 7.3 percent in 2011. However,
the World Average and OIC Average ratios were 5.7 percent and 13.9 percent respectively in
2011. OIC-LMIG values of stock market value traded ratios were 18.2 percent in 2009, 8.7
percent in 2010 and 7.3 percent in 2011. Values of OIC-UMIG and OIC-HIGH countries were
higher than World Average figures in the 2009-2011 periods. Also, there is an outstanding gap
between OIC-HIGH and W-HIGH rates in 2009.
2.2 FINANCIAL ACCESS
The issue of access to finance in broader terms, reflecting education and protection
dimensions as well as access and financial inclusion, has been of growing interest throughout
the world, particularly in emerging and developing economies. Policymakers are increasingly
concerned that the benefits produced by financial intermediation and markets are not being
spread widely enough throughout the population and across economic sectors. Furthermore,
they are perhaps also concerned about the potential negative consequences on stability when
financial concentration is high.
Access to and usage of financial products and services are important dimensions of financial
inclusion. Enhanced access to finance allows individuals and firms to take advantage of
business opportunities, invest in education, save for retirement, and insure against risks.17
16
17
Demirgüç-Kunt, Beck, and Honohan 2008
12
When low income households and small enterprises are excluded from the financial system,
they are forced to use their personal assets to make investments or start up a business, which
results in lower effective utilization of resources.
The number of depositors with commercial banks per 1,000 adults, bank branches per
100,000 adults, adults with an account at a formal financial institution and adults saving at a
financial institution are basic provider side information on the use of financial services. Hence,
these data are analyzed for finding out the level of financial access capacity of financial
institutions in OIC Member States.
The Number of depositors with commercial banks per 1,000 is one of the indicators of access
to financial services. The below Figure shows that there is a significant progress in all the
income levels of OIC Member Countries from 2009 to 2011. Bank accounts per 1,000 adults in
OIC-LIG countries recorded 152 in 2009. This number increased to 186 in 2010 and reached
237 in 2011. There has been a remarkable progress for OIC-LMIG countries. Although in OICLMIG countries, bank accounts per 1,000 were 264 in 2009, this number increased to 344 in
2010 and reached 393 in 2011. The World Average of bank accounts per 1,000 was 434 in
2009 and increased to 503 in 2010 and to 609 in 2011. It can also be observed from the Figure
that there was a significant gap between W-HIGH countries and all OIC income groups. In OICLIG countries, in particular, the usage of financial services still needs to be improved compared
to other OIC groups.
Figure 6: Bank Accounts per 1, 000 adults in OIC Member States
W-HIGH
1.000
800
W-UMIC
600
2009
2010
400
2011
W-LIC
200
0
OIC-LIG
OIC-LMIG
OIC-UMIG
OIC-HIGH
WORLD OIC Average
Average
The Number of bank branches per 100,000 adults is also another important indicator for
financial access in the OIC Member Countries. The Figure-7 shows that there is a progress
slightly in all the income levels from 2009 to 2011 except OIC-UMIG. Bank branches per
13
100,000 adults in OIC-LIG countries recorded 4 in 2009. This number increased approximately
to 5 in 2011. There has been a meaningful progress for LMIG countries. While UMIG countries,
bank branches per 100,000 were 14,5 in 2009, this number increased to 14,9 in 2010 and
again decreased to 14,5 in 2011. OIC-HIGH countries have not recorded any meaningful change
during this period. The World Average bank branches per 100,000 was 14 in 2009 and
increased to 15,5 in 2010 and to 16 in 2011. It can be also observed that W-High rates of Bank
Branches per 100,000 adults were significantly higher than all OIC income groups. In OIC-LIG
countries, in particular, the number of bank branches still needs to be increased compared to
other groups.
Figure 7: Bank Branches per 100,000 Adults in OIC Member States
30
W-HIGH
25
20
W-UMIC
15
2009
2010
10
2011
5
W-LIC
0
OIC-LIG
OIC-LMIG
OIC-UMIG
OIC-HIGH
WORLD OIC Average
Average
Adults with an account at a formal financial institution to total adults are another important
financial indicator in this category. The following Figure shows that only 14.2 percent of adults
in OIC-LIG countries, 16.5 percent of adults in OIC-LMIG countries and 33.9 percent of adults in
OIC-UMIG countries in 2011 had an account at a formal financial institution. However in OICHIGH countries, 66.2 percent of adults in 2011 had an account at a formal financial institution
and this ratio was very high compared to 38.2 percent level of World Average in 2011. As seen
from the Figure, there is a huge discrepancy between country groups among OIC Member
States. OIC-HIGH rate is significantly lower than W-High rate. That is to say, the majority of the
population in low income countries does not have basic financial accounts which are accepted
as a basic financial service.
14
Figure 8: Adults with an Account at a Formal Financial Institution to Total Adults
90%
W-HIGH
80%
70%
60%
50%
W-UMIC
40%
2011
30%
20%
W-LIC
10%
0%
OIC-LIG
OIC-LMIG
OIC-UMIG
OIC-HIGH
WORLD OIC Average
Average
Furthermore, a reasonable level of savings is a basic requirement to increase investments and
to reach sustainable economic growth in OIC Member States. All income groups except OICHIGH countries suffer from low saving rates. Adult saving rates in 2011 for OIC-LIG, OIC-LMIG
and OIC-UMIG countries, were 7.8 percent, 6.7 percent and 9.6 percent, respectively. However,
adult saving rate of OIC-HIGH countries in 2011 was 23.5 percent and 10,2 percent higher than
World Average. Figure also shows that there was a significant gap between average rates of WHIGH income countries and all OIC income groups. Lack of financial capability and awareness
are two of the possible reasons for the low saving rates in low, lower and middle income
countries. Enhanced access to financial services may increase saving rates for the low income
and middle income countries.
Figure 9: Adults Saving at a Financial Institution in the Past Year to Total Adults
40%
W-HIGH
35%
30%
25%
20%
2011
15%
W-UMIC
10%
W-LIC
5%
0%
OIC-LIG
OIC-LMIG
OIC-UMIG
OIC-HIGH
15
WORLD
Average
OIC Average
The measure of access in financial markets relies on various measures of concentration (a high
degree of concentration indicates difficulties for access of market players) in the market. Due
to the lack of data, it is not possible to use main indicators for analysis. However, to give an
idea of concentration in the market, the ‘5 Bank Asset Concentration Ratio’ is applied to OIC
Member States. The volume of the banking sector in the OIC Member States constitutes the
majority of the financial system. In this sense, the ‘5 bank asset concentration ratio’, i.e the
assets of the five largest banks as a share of total commercial banking assets, emerges as a
reasonable indicator of access in financial markets among OIC Member States.
In OIC-LIG countries, five banks had 84 percent of total assets in 2009, 86 percent in 2010 and
80 percent in 2011. However, in OIC-HIGH countries five banks had 89 percent of total assets
in 2009 and 2010 and 92 percent in 2011. Five banks asset concentration ratios of OIC-HIGH
rates were in line with W-High and W-UMIC rates in 2009-2011 period. These figures reveal
that there is a high concentration of few banks in the market.
Figure 10: 5 Bank Asset Concentration Ratios in OIC Member States
95%
90%
W-HIGH
W-LIC
85%
2009
80%
2010
75%
W-UMIC
2011
70%
65%
OIC-LIG
OIC-LMIG
OIC-UMIG
OIC-HIGH
WORLD OIC Average
Average
2.3
FINANCIAL EFFICIENCY
Robust financial systems can increase economic activity and welfare, but instability in the
financial system can disrupt financial activity and impose widespread costs on the economy. It
is obvious that efficient financial systems perform well. Since higher intermediate cost is
reflected on households, governments and firms, lower intermediate costs increase the
efficiency of financial institutions and markets. High efficiency in financial institutions also
increases their profitability.
16
The interest rate spread and non-interest income rates were used to measure efficiency in
financial institutions. A narrow interest rate spread means low transaction costs, which
reduces the cost of funds for investment, crucial to economic growth. 18
Net interest margin (NIM) is a measure of the difference between the interest income
generated by banks or other financial institutions and the amount of interest paid out to their
lenders, relative to the amount of their assets. The Figure-11 shows that NIM rates in OIC-LIG
and OIC-LMIG countries are higher than OIC-UMIG and OIC-HIGH countries. Interest rates are
relatively high for less developed countries to attract more funds compared to more developed
countries. In 2009, NIM rates were 6.7 percent for OIC-LIG and 4.6 percent for OIC-LMIG
countries; 3.7 percent for OIC-UMIG and 3.3 percent for OIC-HIGH countries. When the effects
of the financial crisis passed throughout the year, NIM rates fell down to 6.3 and 5.9 percent in
2010 and 2011 respectively for OIC-LIG and to 4.1 percent in 2010 and 4 percent in 2011 for
OIC-LMIG countries. NIM rates of World Average were 3.7 in 2009, 3.9 in 2010 and 4.3 percent
in 2011, whereas NIM rates of OIC Average were 4.9 in 2009, 4.4 in 2010 and 2011. These
figures reflect the financial vulnerability of those countries.
Figure 11: Net Interest Margin in OIC Member States
8%
7%
W-LIC
6%
5%
W-UMIC
4%
2009
2010
3%
W-HIGH
2%
2011
1%
0%
OIC-LIG
OIC-LMIG
OIC-UMIG
OIC-HIGH
WORLD OIC Average
Average
Lending deposit spread refers to the difference between lending rate and deposit rate. Lending
rate is the rate charged by banks on loans to the private sector and deposit interest rate is the
rate offered by commercial banks.
The following Figure shows that W-LIC lending deposit ratios were close to OIC-LIG rates that
were 11 percent in 2009, 12.2 percent in 2010 and 12.7 percent in 2011 and almost double the
World Average rate, which was 6 percent in the same period. Lending deposit ratios of OICHIGH were 4.1 percent in 2009, 4.3 percent in 2010 and 4.2 percent in 2011; significantly
lower than OIC Average, which amounted to 7.1, 7.3 and 7.6 percent in 2009, 2010 and 2011
18
The World Bank, World Development Indicators,2013
17
respectively. The Figure also shows that W-HIGH countries have lower net interest margin
compared to OIC income groups.
Figure 12: Lending Deposit Spread in OIC Member States
14%
12%
W-LIC
10%
8%
2009
6%
W-UMIC
W-HIGH
4%
2010
2011
2%
0%
OIC-LIG
OIC-LMIG
OIC-UMIG
OIC-HIGH
WORLD OIC Average
Average
Non-interest income is generated by non-interest related activities as a percentage of total
income. Non-interest related income includes net gains on trading and derivatives, net gains
on other securities, net fees and commissions and other operating income. 19
Non-interest income rates of W-LIG rates were slightly higher than OIC-LIG rates which were
42 percent in 2009, 45.6 percent in 2010 and 45.4 percent in 2011; higher than World Average
figures which were 37, 37.1 percent and 35.9 percent in 2009, 2010 and 2011 respectively.
However, OIC-UMIG countries recorded 35.9 percent in 2009, 39.9 percent in 2010 and 38.7
percent in 2011, in line with World Average figures.
Figure 13: Non-Interest Income to Total Income Rates in OIC Member States
50%
W-LIG
40%
W-HIGH
W-UMIC
30%
2009
20%
2010
10%
2011
0%
LIG
LMIG
UMIG
HIGH
WORLD OIC Average
Average
19
18
Stock market turnover ratio was used to measure efficiency in the financial markets of OIC
Member States. Higher turnover ratio refers to relatively higher volumes of trading in the
market and more liquidity, i.e. there is more scope for price discovery, better transmission of
information in the price, and greater efficiency of the market. Stock market turnover ratio
meaning to total value of shares traded divided by the average market capitalization is an
important indicator of the efficiency of financial markets.
On the other hand, stock market turnover data are not available in the majority of OIC Member
States. Therefore, income grouping analysis may give improper information for the efficiency
analysis. Instead of the grouping analysis methodology, it is better to look at figures of several
OIC Member States from each OIC income groups. When the figures are examined, a huge gap
among countries becomes more visible.. Although in 2011, stock market turnover ratios of
Kyrgyz Republic (OIC-LIG) and Cote d’Ivoire (OIC-LMIG) were only 2.6 percent and 1.7 percent
respectively; this ratio was 172 percent in Turkey (OIC-UMIG) and 84 percent in Saudi Arabia
(OIC-HIGH). These figures indicate significant differences in the efficiency of financial markets
of OIC Member States.
2.4 FINANCIAL STABILITY
Financial stability is a vital condition of a well-functioning financial system in the pursuit of
financial development. Although rapid growth of financial sector may appear to be a positive
sign, lack of proper risk management and regulation may lead to systemic risks which can be a
serious threat for financial stability. Consequently, systemic risks may trigger problems in the
financial system and then adversely impacts real economy. In other words, a stable financial
system that promotes efficient savings and investments is only effective when necessary
precautions are taken to ensure an efficient market. In addition, enhanced financial depth,
increased access to finance and efficiency in financial institutions and financial markets are
prerequisites of financial stability.20
In this study, z-score, regulatory capital to risk-weighted assets ratio and non-performing
loans to total gross loans variables are used to measure financial stability of financial
institutions in OIC Member States.
Z-score compares the buffer of a country's banking system with the volatility of returns. It
captures the probability of default of a country's banking system. It is inversely related to the
probability of a financial institution’s insolvency. If financial institutions are able to smooth out
the reported data, the Z-score may provide an overly positive assessment of the stability of the
financial institutions. This means a higher z-score implies a lower probability of insolvency.21
The Figure-14 shows that probability of insolvency is high in OIC-LIG countries compared to
OIC-LMIG, OIC-UMIG, OIC-HIGH countries and even the World Average. In 2011, the Z-score
ratio is about 11 percent for OIC-LIG, 20 percent for OIC-LMIG, 19 percent for OIC-UMIG and
17.4 percent for OIC-HIGH. OIC-LIG countries are more likely to face solvency problems
compared to World Average. However, OIC-LMIG, OIC-UMIG and OIC-HIGH statistics are in line
20
21
The World Bank, World Development Indicators,2013
19
with OIC Average figures and have better Z-score rates compared to World Average and World
Income Groups.
Figure 14: Z-Scores in OIC Member States
25
20
15
10
W-UMIC
W-HIGH
2009
W-LIC
2010
2011
5
0
OIC-LIG
OIC-LMIG
OIC-UMIG
OIC-HIGH
WORLD OIC Average
Average
Regulatory capital to risk-weighted assets means a ratio of total regulatory capital to its held
assets, weighted according to the risk of those assets.22 Risk weighted asset ratio plays a
significant role in the robustness of the financial institutions in the face of shocks. International
financial institutions, in particular the Bank for International Settlement (BIS), recommend
holding optimum capital against the risk instruments to prevent systemic risk. However,
regulatory capital to risk-weighted assets data is not available in the majority of OIC Member
States. Instead of the grouping analysis methodology, it could be better to analyze such
countries that generate data in this field. Among member states, regulatory capital to riskweighted assets of Kyrgyz Republic (OIC-LIG) and Sierra Leone (OIC-LIG) was 30.3 percent and
27 percent in 2011 respectively, whereas it was 9.9 percent in Nigeria (OIC-LMIG), 12.1
percent in Lebanon (OIC-UMIG), 16,5 percent in Turkey (OIC-UMIG) and 21,2 in United Arab
Emirates (OIC-HIGH) in 2011. According to available data the majority of OIC member states
showed comparatively better performance than World Average (15.8).
Non-performing loans (NPL) occur as a result of breaching the provisions of loan contracts
regarding pre-set payment dates. Generally, it is described as overdue payments for more than
a predetermined number of days. NPL ratio is the ratio of defaulting loans to total gross loans.
The higher NPL ratio, the higher the possibility of insolvency in the banking sector is.
22
20
Figure 15: Non-Performing Loans in OIC Member States
14%
12%
10%
8%
W-LIC
6%
2009
2010
4%
W-HIGH
W-UMIC
2011
2%
0%
OIC-LIG
OIC-LMIG
OIC-UMIG
OIC-HIGH
WORLD OIC Average
Average
The Figure-15 shows that NPL ratios of OIC-LIG countries were 9.3 percent in 2009, 10.5
percent in 2010 and 9 percent in 2011; in parallel to OIC Average ratios which were about 9.5
percent in 2009, 9.4 percent in 2010 and 8.7 percent in 2011. However, NPL ratios of OICHIGH countries were 5.5 percent in 2009, 5.1 percent in 2010 and 4.5 percent in 2011, slightly
higher than World Average and W-HIGH figures which were 4.3 percent in 2009, 4 percent in
2010 and 2011. OIC-LIG, OIC-LMIG, OIC-UMIG and OIC-HIGH countries have higher possibility
of solvency compared to W-UMIC countries in banking sector.
Market volatility is one of the most widely used indicators for financial stability. In this study,
volatility of stock price index was used to measure the financial stability of financial markets of
OIC Member States. Volatility of stock price index is the 360-day standard deviation of the
return on the national stock market index and is an important indicator of stability in the
financial markets. The Figure-16 expresses the level of volatility of stock prices of OIC groups
according to their income levels. Volatility index rates of OIC-LIG countries were 36.5 percent
in 2009 and 30.4 percent in 2010; higher than OIC Average rates which were 34.1 and 24.5
percent in 2009, 2010 respectively. Volatility index rates of OIC-HIGH countries were 32
percent in 2009 and 22.4 percent in 2010, whereas they were moderately lower than World
Average figures of 40.8 percent in 2009 and 30.5 percent in 2010.
21
Figure 16: Volatility of Stock Prices in OIC Member States
45
40
35
30
25
2009
20
W-HIGH
W-UMIC
15
10
W-LIC
5
0
OIC-LMIG
OIC-UMIG
OIC-HIGH WORLD Average OIC Average
22
2010
3. FINANCIAL COOPERATION UNDER THE COMCEC
The financial cooperation area has a great potential for the socio-economic development of the
OIC member countries. This potential could not be fully realized due to several reasons. The
majority of the OIC Member States financial markets are not efficient to support a sustainable
economic growth and development, especially in low and lower-middle income OIC countries.
Member States confront some economic and financial difficulties due to the small size of their
financial markets, lack of diversified financial products and inefficiency of their financial
institutions. Therefore, COMCEC aims to help the Member States overcome the obstacles faced
in the area of financial cooperation.
The ideas for enhancing financial cooperation under the COMCEC date back to its initial
meetings. The Cooperation efforts in this area have been intensified and deepened in recent
years. The COMCEC Strategy, adopted by the 4th Extraordinary Islamic Summit in 2012,
defined finance as one of the cooperation areas of COMCEC. Furthermore, there are also
several on-going efforts in this field such as cooperation among the Stock Exchanges Forum,
COMCEC Capital Markets Regulators Forum and the Meetings of Central Banks and Monetary
Authorities.
3.1 THE COMCEC STRATEGY: FINANCIAL COOPERATION
COMCEC Strategy defines “deepening financial cooperation among the member countries” as
the strategic objective of the COMCEC in this field. The Strategy identifies, “Regulatory and
Supervisory Cooperation”, “Capital Flows”, “Visibility of Financial Markets”, “Training, R&D
Activities and Statistics” as output areas in its finance section and specifies several expected
outcomes under each of them.
3.1.1 REGULATORY AND SUPERVISIORY COOPERATION
COMCEC aims to help to improve the quality of regulation, supervision and cooperation among
regulatory and supervisory bodies in the OIC Member States. The expected outcomes defined
by the Strategy are as follows:

Developed legal, regulatory and institutional framework,

More standardized contracts and more harmonized regulations,

Converged listing requirements, trading rules and technical infrastructure,

Strengthened arbitration procedures, credit information and credit registry system,
risk measurement and risk management systems.
23
3.1.2 CAPITAL FLOWS
Attracting capital flows at competitive rate is one of the major common challenges faced in
many OIC Member States. In this regard, COMCEC will support to ease the capital flows within
the member countries through contributing to removal of institutional and regulatory barriers
and developing relevant platforms. The Strategy envisages the following expected outcomes:



Enhanced access to capital at competitive rates,
Diversified portfolios,
Increased investment opportunities.
3.1.3 VISIBILITY OF FINANCIAL MARKETS
Financial visibility is crucial for attracting more FDI and capital flows, and also for the
deepening of the market. With this view, COMCEC will help to enhance the visibility of financial
markets in the member countries. Regarding the Visibility of Financial Markets, the expected
outcomes introduced by the Strategy are given below:



Enhanced awareness on Islamic financial markets,
Increased issuance and listing of securities,
Attracted foreign investment.
BOX 1:Rise of Islamic Finance
Islamic finance has become an important part of the international financial system and was,
certainly, one of its fastest growing components over the last decades. In the wake of the
financial crisis, there has been a renewed debate on the role that Islamic finance can play,
with its strong ethical principles and asset based approach, in the stabilization of the global
financial system. 23
The value of Islamic financial assets worldwide increased from USD 150 billion in the mid1990s to about USD 1.8 trillion by end-2013. Islamic banking (80%) and sukuk (15%)
sectors still lead the Islamic finance industry24. The total value of assets is estimated to
surpass USD 2 trillion in 2014. Despite the formidable growth of the last few years, Islamic
finance still accounts for a relatively small share of global finance, Islamic financial assets
make up less than 1 percent of the world’s financial assets25, and remains mostly localized in
selected areas of the world, particularly in the Middle East and South Eastern Asia.
European Central Bank, Islamic Finance in Europe, June 2013
Kuwait Finance House, Islamic Finance 1Q2014 Performance Review, July 2014
25 IMF, IMF Working Paper, Islamic Finance in Sub-Sahran Africa: Status and Prospects, August
2014
23
24
24
Figure 17: Trends in Global Islamic Finance Assets (billion USD)
$2.000
1800
$1.800
1600
$1.600
1289
$1.400
1130
$1.200
933
$1.000
861
$800
$600
677
509
$400
$200
$0
2006
2007
2008
2009
2010
2011
2012
2013
Source: SESRIC, European Central Bank and Islamic Finance 1Q2014 Performance Review
Islamic banking has become the fastest growing segment of the international financial
system as well as the global Islamic finance industry. The Islamic banking industry, in
particular, has been growing at a sustained rate, despite being at a nascent stage. Islamic
banks handled approximately USD 1.54 trillion in Shari’ah compliant assets with commercial
banks globally at the end of 2012, and it is estimated that the total assets was USD 1.7
Trillion in 2013 with an annual growth of 17.6% over last four years26.
Figure 18: Growth Rate of Global Islamic Finance Assets
35%
33,0%
30%
27,2%
24,1%
25%
21,1%
20%
14,1%
15%
12,5%
8,4%
10%
5%
0%
2007
2008
2009
2010
2011
2012
Source: SESRIC and European Central Bank
26
Ernst & Young , World Islamic Banking Competitiveness Report 2013-2014,
25
2013
Islamic banking continues to dominate the global Islamic finance industry, representing
about 80 percent of total Islamic financial assets. Iran, four prominent Gulf States (i.e. Saudi
Arabia, the United Arab Emirates, Kuwait, and Qatar), as well as countries in South-East Asia
account for most of the Islamic banking market. On the other hand, the other regions like
Sub-Saharan Africa have great potentials for financial deepening. For instance, as of end2012, about 38 Islamic finance institutions- comprising commercial banks, investments
banks, and takaful (insurance) operators- were operating in Africa. Out of this, 21 operated
in North Africa, Mauritania and Sudan, and 17 in Sub-Saharan Africa27 in 2012.
Figure 19: Global Islamic
billions)
16,6
Financial Assets: Geographical Breakdown, 2012 (US$
59,1
SSA
North America/ Europe
284,2
469,1
Asia
GCC
Mena ( ex- GCC)
500,3
Source: IMF, IMF Working Paper, Islamic Finance in Sub-Saharan Africa: Status and Prospects, August 2014
In terms of banking, Islamic banks managed to remain stable at the early phases of the crisis,
driven as such by three main factors: First, compared to conventional banks’ financial
activities that are more focused on the real economic activities, Islamic banks’ activities are
based on asset-based transactions. Second, conventional banks have financial instruments
such as collateralized debt obligations, cash management bills and credit default swaps that
are considered contributors to the financial crisis and these instruments have no place in
Islamic banks. Third, in general larger proportion of Islamic banks is in illiquid form unlike
their conventional counterparts.28
Although Islamic finance is at an early stage, it includes huge potential for OIC Member
IMF, IMF Working Paper, Islamic Finance in Sub-Sahran Africa: Status and Prospects, August
2014
27
Impact of the Financial Crisis on Profitability of the Islamic Banks vs Conventional Banks- Evidence from GCC, Muni Sekhar
Amba& Fayza Almukharreq, 2013
28
26
States to support diversification of financial instruments in order to reach a sustainable
economic growth. For the sake of real economy, Islamic financial products present beneficial
investment opportunities for the regional investors and international funds.
Figure 20: Composition of Global Islamic Financial Assets
15,00%
4,00%
1,00%
Sukuk
Islamic Funds
Takaful
Islamic Banking
80,00%
Source: Kuwait Finance House, Islamic Finance 1Q2014 Performance Review, July 2014
3.1.4 TRAINING, R&D ACTIVITIES AND STATISTICS
The lack of sound statistical capacity and lack of diversified products due to limited R&D
activities are main challenges of OIC Member States. In this framework, COMCEC attaches great
importance to training and R&D activities to improve human capital for a sustainable growth
and economy. COMCEC also assists OIC Member States in monitoring their financial markets
and financial institutions to ensure their efficiency and stability. The expected outcomes of the
Strategy concerning this Output Area are:

Enhanced diversification and variety of financial products,

Developed platforms for payment and settlement systems and post trade services,

Developed human resources and increased financial literacy,

Reliable and consistent financial system database and creation of indicators of
financially sound systems,

Enhanced monitoring of financial institutions and markets.
27
3.2 IMPLEMENTATION OF THE STRATEGY
In line with its objectives and expected outcomes, the COMCEC Strategy brings well-identified
operational instruments, i.e. the Working Groups and the COMCEC Project Cycle Management
(PCM).
3.2.1
COMCEC FINANCIAL COOPERATION WORKING GROUP
The COMCEC Financial Cooperation Working Group aims to bring the relevant finance experts
from the OIC Member States regularly together and to serve as a regular platform for the
Member Country experts to discuss their common issues in finance sector and share their
knowledge, experiences and best practices, for disseminating knowledge, developing common
understanding and approximating policies among Member Countries.
The First Financial Cooperation Working Group Meeting was held on December 12th, 2013, in
Ankara with the theme of “Enhancing Capital flows in the OIC Member States”. The Meeting
was attended by the representatives of the 14 Member States, which have notified their focal
points for the Financial Cooperation Working Group. SESRIC, Secretariat of the OIC Member
States' Stock Exchanges Forum, Secretariat of the COMCEC Capital Markets Regulators Forum,
representatives from international institutions and some other esteemed guests have also
attended the Meeting. The Meeting has considered the analytical study titled “Barriers and
Opportunities for Enhancing Capital Flows in the COMCEC Member Countries” and “COMCEC
Finance Outlook 2013” prepared by the COMCEC Coordination Office (CCO). During the
meeting, participants have discussed deliberated on how to improve capital flows among the
Member Countries and highlighted major challenges in this regard. The barriers such as
government controls on capital transactions, underdeveloped capital markets, weak
enforcement of regulations, unattractive taxation regimes and insufficient capacity are among
the major obstacles highlighted during the Meeting.
The Second Meeting of the COMCEC Financial Cooperation Working Group was held on March
27th, 2014 with the theme of “Enhancing Financial Inclusion in the Member States”. An
analytical study was also prepared on the theme of the Meeting and circulated to all member
countries. The Meeting was attended by the representatives of 17 Member States, which have
notified their focal points for the Financial Cooperation Working Group and SESRIC,
Secretariat of the OIC Member States' Stock Exchanges Forum, Secretariat of the COMCEC
Capital Markets Regulators Forum, Islamic Development Bank Group (IDB), World Bank,
World Bank Global Islamic Finance Development Centre and Participation Banks Association
of Turkey. The participants have deliberated on the institutional framework for financial
inclusion in the Member Countries, barriers on enhancing financial inclusion and measures for
reducing financially excluded population in the Member Countries and the policy
recommendations for enhancing financial inclusion in the Member Countries.
28
The proceedings of the abovementioned Meetings and the presentations made during these
Meetings are available on the COMCEC Web page (www.comcec.org).
The third Meeting will be held on October 16th, 2014 in Ankara, Turkey with the theme of
“Risk Management in Islamic Financial Instruments”. The COMCEC Financial Cooperation
Working Group, during its third Meeting, is expected to deliberate on risk management in
Islamic financial instruments, identify challenges faced by the Member Countries, and provide
policy recommendations to enhance the cooperation in in this field.
3.2.2
PROJECT CYCLE MANAGEMENT (PCM)
The other important instrument for the implementation of COMCEC Strategy is the new
COMCEC Project Cycle Management (PCM). Within the COMCEC PCM, the member countries
registered for the Financial Cooperation Working Group and the OIC Institutions operating in
the field of economic and commercial cooperation would have the opportunity to propose
concrete multilateral cooperation projects in line with the objectives, expected outcomes and
principles of the Strategy; the projects are being financed by CCO through grants.
The first project call within the scope of the COMCEC PCM was made in September 2013. The
Final List of the COMCEC-PCM was announced on March 9th, 2014. Regarding Financial
Cooperation field, Cameroon’s project titled “Workshop on the Challenges of Electronic Payment
Systems in West and Central African States” has been final-listed. In this context, the Member
Countries are expected to submit concrete proposals to the CCO under the 2nd project call
made in September 2014.
3.3 ON-GOING ACTIVITIES UNDER THE COMCEC
3.3.1
OIC MEMBER STATES STOCK EXCHANGES FORUM
COMCEC initiated the cooperation among Stock Exchanges of the Member States in 2005 and
"OIC Member States Stock Exchanges Forum" was established in this regard. The Forum
focuses on the harmonization of the rules and regulations governing market operations, as
well as opening communication channels for the stock exchanges of the OIC Member Countries
and relevant institutions.
The Forum provides a regular cooperation platform for the Stock Exchanges of the member
countries to share their experiences and knowledge on harmonizing the rules and regulations
governing market operations, as well as for increasing the amount of international portfolio
investments flowing to OIC Member States.
The Forum has convened seven times till now and has achieved remarkable progress in
deepening cooperation among the Stock Exchanges of the Member States. It has completed its
work regarding the S&P OIC/COMCEC Index. The Index, launched on June 22nd 2012, in
29
Istanbul, was designed to measure the performance of 50 leading companies from the 19
member states of OIC, namely, Bahrain, Bangladesh, Cote D’ivoire, Egypt, Indonesia, Jordan,
Kazakhstan, Kuwait, Lebanon, Malaysia, Morocco, Nigeria, Oman, Pakistan, Qatar, Saudi Arabia,
Tunisia, Turkey and the United Arab Emirates. The official launching ceremony of the Index
was held during the 28th Session of the COMCEC. The 8th OIC Member States Stock Exchanges
Forum will be held on November 11th, 2014 in İstanbul.
3.3.2
COMCEC CAPITAL MARKETS REGULATORS FORUM
In line with the relevant resolutions of the 25th and the 26th Sessions of the COMCEC calling
for developing a cooperation mechanism for capital markets regulatory bodies of the Member
States, the COMCEC Capital Markets Regulators Forum was established in 2011.
The Forum aims at increasing coordination and cooperation in regulatory and legal
infrastructure with a view to achieving more harmonized policies and regulations among the
OIC Member States, supporting market development and reinforcing capabilities of regulatory
authorities.
Capacity Building, Market Development, Islamic Finance and Financial Literacy Task Forces
have been established under the Forum in recent period. These Task Forces prepared the
reports on Development of Capital Market Infrastructures, Enhancing Financial Literacy in
Capital Market, and Enhancing Infrastructure for Islamic Capital Market and submitted these
reports to the 2nd COMCEC Capital Markets Regulators Forum held on September 19th 2013, in
İstanbul. The 3rd COMCEC Capital Markets Regulators Forum will be held on November 11 th,
2014 in İstanbul.
3.3.3
COOPERATION AMONG THE CENTRAL BANKS AND MONETARY
AUTHORITIES
As per the resolution of the 24th Session of the COMCEC, since 2009 the Central Banks and
Monetary Authorities of the Member Countries of the OIC have regularly convened for sharing
experiences and enhancing institutional and human capacity in this field.
Working groups have been established under this fruitful cooperation platform to prepare
technical background papers in the following areas: Payment Systems (Co‐chairs: Turkey and
Indonesia), Macro‐ Prudential Regulations (Co‐chairs: Sudan and United Arab Emirates), and
Liquidity Management in Islamic Finance (Co‐chairs: Malaysia and Bahrain).
The 13th Meeting of the Central Banks and Monetary Authorities of the Member Countries was
held on 27-28 November 2013 in Saudi Arabia. The Fourteenth Meeting will be held on 5-6
November, 2014 in Surabaya, Indonesia.
30
CONCLUSION
This COMCEC Financial Outlook-2014 provides various aspects of finance sector in the OIC
Member States and touches upon the cooperation endeavours under the COMCEC. In this
outlook, in addition to the financial depth, access, efficiency and stability dimensions of the
financial markets and institutions of OIC Member States, in particular the banking sector and
security markets of OIC Member States are examined.
With regard to financial depth indicators, OIC-LIG and OIC-LMIG countries suffer from
inadequate access to credit more than high-income group countries. Indicators show that the
lack of private credit opportunities for OIC-LIG is an important obstacle to increase investment
and growth compared to World and OIC Average. OIC-LIG and OIC-LMIG have very low levels
of bank deposits, bank account and bank branches compared to OIC-UMIG and OIC-HIGH. In
2011, LIG countries recorded 23.3 percent bank deposit ratio and OIC-LMIG countries
recorded about 37.1 percent bank deposit ratio. Obviously it should be mentioned that
generally for all OIC Member States deposit levels are very important for stimulating
investments, mobilizing savings, easing access to finance in the financial system. In terms of
stock market, it consist of securities, public and corporate bonds, future and option contracts.
It is clear that a well-functioning stock market attracts foreign investors for the countries
which need FDIs. Moreover, current available data indicate the need for market capitalization
of OIC-LIG and OIC-LMIG compared to other OIC groups.
Access to and usage of financial products and services are seen as important dimensions of
financial operations. Enhanced access to finance allows individuals and firms to take
advantage of business opportunities, invest in education, save for retirement, and insure
against risks. The situation in OIC Member Countries is that bank accounts per 1,000 adults in
OIC-LIG countries recorded 152 in 2009. This number increased to 186 in 2010 and reached
237 in 2011. There has been a remarkable progress for OIC-UMIG countries. In OIC-LIG
countries, in particular, the usage of financial services still needs to be improved compared to
other OIC groups. Obviously, the majority of the population in low-income countries does not
have basic financial accounts, which are accepted as a basic financial service. It is certain that
enhanced access to financial services may increase saving rates for the low-income and
middle-income countries. Data dissemination is also another problem in the IC Member
Countries, which influences the comprehensive analysis of market players.
With regard to the financial efficiency, scrutinizing financial efficiency performance of the OIC
Member States indicates conspicuous differences among them. This outlook figures show that
NIM rates in OIC-LIG and OIC-LMIG countries are higher than OIC-UMIG and OIC-HIGH
countries. Interest rates are relatively high for less developed countries to attract more funds
compared to more developed countries which still remains as one of the main problems for
developing OIC markets and it makes their markets inefficient. In addition, stock market
turnover data are not available in the majority of OIC Member States.
Analyzing the financial stability of financial institutions of OIC Member States, OIC-LIG
countries are more likely to face problems of a default in the banking system according to
analyzed Z-score values. OIC-LIG countries are more likely to face solvency problems
31
compared to World Average. However, OIC-LMIG, OIC-UMIG and OIC-HIGH statistics are in line
with OIC Average figures and have better Z-score rates compared to World Average and World
Income Groups. Furthermore, Financial Cooperation is also a crucial item of the COMCEC
Agenda. Though the ideas for enhancing financial cooperation under the COMCEC date back to
its initial meetings, the cooperation efforts in this area have been intensified and deepened in
recent years. COMCEC has already initiated cooperation in various areas of financial sector
including OIC Member States Stock Exchanges Forum, COMCEC Capital Markets Regulators
Forum and cooperation among Central Banks and Monetary Authorities. In addition to these
COMCEC financial cooperation initiatives, under the Financial Cooperation Working Group
mechanism, the cooperation efforts have gained a new momentum. The COMCEC Financial
Cooperation Working Group envisaged by the Strategy provides the necessary ground for the
Member Countries experts to elaborate on the issues of common concern. The COMCEC
Financial Cooperation Working Group would complement the ongoing efforts under the OIC
Member States Stock Exchanges Forum, the COMCEC Capital Markets Regulators Forum and
Cooperation among the Central Banks and Monetary Authorities.
32
APPENDIX
Table 3: Selected Financial Data on LIG-OIC Member States (2009)
Categories
Low Income Group
US$ 1035 or less
1 Afghanistan
2 Bangladesh
3 Benin
4 Burkina Faso
5 Chad
6 Comoros
7 The Gambia
8 Guinea
9 Guinea-Bissau
10 Kyrgyz Republic
11 Mali
12 Mozambique
13 Niger
14 Sierra Leone
15 Tajikistan
16 Togo
17 Uganda
Financial Depth
Financial Access
Private
Bank
Stock market
credit by deposits capitalization
deposit to GDP (%) to GDP (%)
money
banks and
other
financial
institutions
to GDP (%)
7,64
37,69
21,14
16,62
4,88
13,27
12,87
3,88
5,06
N/A
16,87
20,46
11,33
6,92
N/A
17,77
11,08
13,11
47,35
25,06
17,78
6,03
20,94
33,56
13,83
9,37
N/A
18,16
30,69
10,49
15,18
N/A
28,56
15,04
N/A
7,64
N/A
N/A
N/A
N/A
N/A
N/A
N/A
1,62
N/A
N/A
N/A
N/A
N/A
N/A
20,68
Stock
market
total
value
traded to
GDP (%)
Bank
accounts
per 1,000
adults
N/A
13,16
N/A
N/A
N/A
N/A
N/A
N/A
N/A
1,74
N/A
N/A
N/A
N/A
N/A
N/A
0,26
N/A
274,63
N/A
N/A
15,42
60,27
N/A
N/A
N/A
74,60
N/A
N/A
N/A
109,23
365,46
203,62
167,86
Bank
branches
per
100,000
adults
N/A
7,28
N/A
N/A
0,57
1,22
7,25
1,19
N/A
6,94
N/A
2,87
N/A
2,66
5,90
4,18
2,31
Financial Efficiency
Adults Adults 5-bank asset Net
Lending- Nonwith an saving at concentration interest deposit interest
account at a fin. inst.
margin (%) spread income to
a formal in the past
(%)
total
fin. inst. to year to
income
total
total
(%)
adults (%) adults (%)
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
Source: The World Bank Database
33
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
89,85
44,25
98,14
85,78
N/A
N/A
100,00
N/A
N/A
N/A
86,90
94,70
N/A
87,24
N/A
N/A
72,17
23,49
40,94
40,27
46,52
48,41
N/A
42,32
60,38
60,26
20,72
44,90
41,96
42,65
50,38
29,46
4,61
37,05
N/A
6,40
N/A
N/A
N/A
5,13
11,50
N/A
N/A
19,16
N/A
6,15
N/A
13,08
15,02
N/A
11,20
31,07
40,13
37,12
72,76
N/A
N/A
52,40
46,73
47,97
30,25
58,74
33,52
50,49
39,01
62,67
52,91
33,11
Financial Stability
Stock
Bank Zmarket score
turnover
ratio
(value
traded/cap
italization)
(%)
N/A
213,86
N/A
N/A
N/A
N/A
N/A
N/A
N/A
89,03
N/A
N/A
N/A
N/A
N/A
N/A
0,31
13,09
8,16
15,91
7,87
17,55
N/A
5,62
2,96
N/A
33,64
10,97
2,12
18,78
4,27
10,67
4,42
19,91
Regulatory Bank non- Volatility
capital to performing of stock
riskloans to price
weighted gross
index
assets (%) loans (%)
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
33,50
N/A
15,10
N/A
34,00
30,00
N/A
20,90
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
8,20
N/A
1,80
N/A
10,60
21,60
N/A
4,20
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
Table 4: Selected Financial Data on LMIG-OIC Member States (2009)
Categories
Financial Depth
Financial Access
Private Bank
Stock market Stock
credit by deposits capitalization market
deposit to GDP (%) to GDP (%) total
Lower middle income money
value
group US$ 1,036 to banks and
traded to
other
GDP (%)
US$ 4,085
financial
institutions
to GDP (%)
1 Cameroon
2 Côte d'Ivoire
3 Djibouti
4 Egypt
5 Guyana
6 Indonesia
7 Mauritania
8 Morocco
9 Nigeria
10 Pakistan
11 Senegal
12 Sudan
13 Syria
14 Uzbekistan
15 Yemen
10,09
16,38
25,79
37,03
56,12
25,18
27,79
74,52
35,39
23,84
24,07
9,68
17,47
N/A
6,64
15,90
18,49
71,73
68,89
84,58
31,90
22,86
81,60
34,06
29,63
26,73
12,18
48,17
N/A
19,79
N/A
27,81
N/A
47,21
14,36
24,86
N/A
69,56
21,74
15,89
N/A
N/A
N/A
N/A
N/A
Bank
accounts
per 1,000
adults
N/A
0,93
N/A
33,21
N/A
20,18
N/A
27,89
6,27
21,01
N/A
N/A
N/A
N/A
N/A
71,07
N/A
91,09
N/A
N/A
N/A
N/A
N/A
454,39
206,95
90,81
N/A
195,61
900,45
103,18
Bank
branches
per
100,000
adults
1,42
N/A
N/A
4,61
6,69
7,51
4,20
19,62
6,34
8,32
3,89
1,91
3,65
46,80
1,96
(%)
total
income
total
total
(%)
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
34
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
89,16
88,51
N/A
67,66
N/A
60,61
100,00
92,76
75,59
56,21
85,53
81,66
88,48
94,08
N/A
5,46
5,14
3,40
2,37
5,60
6,59
4,39
3,06
7,18
5,22
6,50
4,65
0,93
3,26
4,97
N/A
N/A
9,72
5,48
12,22
5,22
11,50
N/A
5,07
5,86
N/A
N/A
3,66
N/A
7,33
31,33
52,38
7,77
31,43
30,77
22,15
61,36
27,36
42,85
23,97
27,45
48,47
28,64
62,70
23,61
Financial Stability
Stock
Bank Zmarket score
turnover
ratio
(value
traded/cap
italization)
(%)
N/A
2,08
N/A
59,20
N/A
85,95
N/A
46,52
12,48
91,48
N/A
N/A
N/A
N/A
N/A
16,08
18,90
11,42
40,32
18,96
1,65
24,59
41,72
-4,51
13,89
40,42
20,84
6,75
7,69
24,29
riskloans to price
weighted gross
index
N/A
N/A
N/A
15,10
N/A
17,40
N/A
11,70
20,90
14,00
16,50
N/A
N/A
23,40
N/A
N/A
N/A
N/A
13,40
N/A
3,30
N/A
5,50
36,10
12,60
18,70
N/A
N/A
1,20
N/A
N/A
N/A
N/A
40,04
N/A
48,37
N/A
25,35
29,14
39,58
N/A
N/A
N/A
N/A
N/A
Table 5: Selected Financial Data on UMIG-OIC Member States (2009)
Categories
Financial Depth
Financial Access
Private Bank
Stock market Stock
Upper middle income deposit to GDP (%) to GDP (%) total
money
value
US$ 4,086 to
banks and
traded to
US$12,615
other
GDP (%)
financial
institutions
to GDP (%)
1 Albania
2 Algeria
3 Azerbaijan
4 Gabon
5 Iran
6 Iraq
7 Jordan
8 Kazakhstan
9 Lebanon
10 Libya
11 Malaysia
12 Maldives
13 Suriname
14 Tunisia
15 Turkey
16 Turkmenistan
34,64
15,47
17,87
9,76
43,09
3,29
74,22
50,60
64,27
9,32
107,59
93,73
22,09
58,75
34,21
N/A
55,33
48,90
11,73
16,25
32,10
15,51
93,70
32,09
205,99
39,06
122,09
65,36
35,15
48,23
47,79
N/A
N/A
N/A
N/A
N/A
16,48
N/A
140,85
35,82
32,02
N/A
107,06
N/A
N/A
17,01
25,91
N/A
Bank
accounts
per 1,000
adults
N/A
N/A
N/A
N/A
4,76
N/A
86,97
2,98
2,48
N/A
38,07
N/A
N/A
3,00
35,82
N/A
N/A
355,17
295,70
114,40
N/A
N/A
N/A
886,49
878,96
N/A
N/A
N/A
N/A
697,48
N/A
N/A
Bank
branches
per
100,000
adults
22,07
5,27
9,52
4,34
28,06
N/A
19,12
3,38
29,94
10,84
10,44
16,83
10,55
15,04
17,10
N/A
(%)
total
income
total
total
(%)
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
35
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
83,77
89,75
55,88
N/A
N/A
N/A
98,21
73,97
66,75
100,00
67,10
N/A
N/A
62,46
70,97
N/A
4,33
2,40
6,64
5,59
N/A
3,62
3,47
1,97
2,57
2,10
2,79
6,05
4,83
3,25
5,96
0,59
5,89
6,25
7,83
N/A
N/A
N/A
4,30
N/A
2,25
3,50
3,00
6,50
5,28
N/A
N/A
N/A
24,00
42,66
30,57
55,43
N/A
65,78
28,05
24,35
31,83
38,30
29,00
33,80
26,13
32,56
26,86
49,62
Financial Stability
Stock
Bank Zmarket score
turnover
ratio
(value
traded/cap
italization)
(%)
N/A
N/A
N/A
N/A
31,27
N/A
40,67
9,77
9,39
N/A
33,70
N/A
N/A
16,98
152,94
N/A
24,80
19,11
10,86
14,36
N/A
19,56
47,87
-4,73
36,17
70,51
23,58
N/A
14,35
25,50
6,12
5,71
riskloans to price
weighted gross
index
16,20
N/A
N/A
24,00
N/A
N/A
19,60
N/A
13,70
N/A
18,20
N/A
N/A
N/A
20,60
N/A
10,50
N/A
N/A
7,20
N/A
N/A
6,70
21,20
6,00
N/A
3,60
N/A
N/A
N/A
5,00
N/A
N/A
N/A
N/A
N/A
N/A
N/A
30,39
55,98
23,76
N/A
23,81
N/A
N/A
16,58
55,68
N/A
Table 6: Selected Financial Data on HIG-OIC Member States (2009)
Categories
Financial Depth
Financial Access
Private Bank
Stock market Stock
value
High income group money
banks and
traded to
US$ 12,616 or more other
GDP (%)
financial
institutions
to GDP (%)
1 Bahrain
2 Brunei Darussalam
3 Kuwait
4 Oman
5 Qatar
6 Saudi Arabia
7 United Arab Emirates
133,37
45,37
85,48
45,12
48,60
70,23
78,32
88,36
68,67
73,99
37,82
53,23
27,37
67,19
Bank
accounts
per 1,000
adults
98,40 9,89 N/A
N/A N/A N/A
92,09 86,91 N/A
34,05 15,05 N/A
82,15 36,15 598,54
74,82 114,99 721,62
38,24 38,82 N/A
Bank
branches
per
100,000
adults
N/A
23,28
17,50
22,74
18,12
8,30
14,07
(%) total
income
total
total
(%)
N/A
N/A
N/A
N/A
N/A
N/A
N/A
36
N/A
N/A
N/A
N/A
N/A
N/A
N/A
93,90
N/A
N/A
100,00
94,91
77,65
80,05
2,35
5,92
2,83
3,60
2,66
3,07
2,68
6,36
4,80
3,33
3,30
2,81
N/A
N/A
30,74
37,95
32,59
27,74
36,01
28,71
33,09
Financial Stability
Stock
Bank Zmarket score
turnover
ratio
(value
traded/cap
italization)
(%)
4,51
N/A
71,70
36,55
31,82
119,57
63,57
18,46
6,15
15,90
14,51
25,93
13,87
21,36
riskloans to price
weighted gross
index
N/A
N/A
16,70
15,50
N/A
16,50
19,90
N/A
N/A
11,50
2,70
N/A
3,30
4,30
13,60
N/A
19,24
37,09
41,51
38,42
41,84
Categories
Low Income Group
US$ 1035 or less
1 Afghanistan
2 Bangladesh
3 Benin
4 Burkina Faso
5 Chad
6 Comoros
7 The Gambia
8 Guinea
9 Guinea-Bissau
10 Kyrgyz Republic
11 Mali
12 Mozambique
13 Niger
14 Sierra Leone
15 Tajikistan
16 Togo
17 Uganda
Financial Depth
Financial Access
Private
Bank
Stock market
money
banks and
other
financial
institutions
to GDP (%)
8,96
41,23
22,54
16,59
4,59
17,53
13,37
4,30
5,70
N/A
17,14
24,23
11,77
9,22
N/A
20,59
12,01
15,08
46,64
27,16
20,94
5,58
23,91
35,65
17,02
11,10
N/A
19,63
34,00
11,11
19,23
N/A
31,35
16,67
N/A
11,08
N/A
N/A
N/A
N/A
N/A
N/A
N/A
1,50
N/A
N/A
N/A
N/A
N/A
N/A
15,28
Stock
market
total
value
traded to
GDP (%)
Bank
accounts
per 1,000
adults
N/A
14,47
N/A
N/A
N/A
N/A
N/A
N/A
N/A
0,79
N/A
N/A
N/A
N/A
N/A
N/A
0,06
N/A
328,35
N/A
N/A
18,95
74,25
N/A
N/A
N/A
100,91
N/A
N/A
N/A
183,52
413,68
N/A
186,15
Bank
branches
per
100,000
adults
N/A
7,53
N/A
N/A
0,64
1,42
8,88
1,30
0,00
6,11
N/A
3,30
N/A
2,81
6,16
N/A
2,41
(%)
total
income
total
total
(%)
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
37
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
90,02
41,13
N/A
93,48
N/A
N/A
N/A
N/A
N/A
N/A
100,00
95,29
N/A
96,71
100,00
N/A
72,63
5,36
4,49
3,79
3,95
N/A
N/A
8,30
3,29
5,05
9,83
3,88
7,72
4,92
11,17
7,42
3,72
8,57
N/A
5,86
N/A
N/A
N/A
5,25
12,38
N/A
N/A
27,41
N/A
6,58
N/A
12,30
15,54
N/A
12,49
37,18
44,59
42,50
53,71
N/A
N/A
53,58
65,89
53,14
24,47
50,32
39,76
41,89
45,12
50,57
53,38
35,66
Financial Stability
Stock
Bank Zmarket score
turnover
ratio
(value
traded/cap
italization)
(%)
N/A
132,14
N/A
N/A
N/A
N/A
N/A
N/A
N/A
12,53
N/A
N/A
N/A
N/A
N/A
N/A
0,38
9,72
9,64
17,44
7,47
N/A
N/A
5,19
3,11
N/A
26,93
16,78
2,24
18,80
4,54
9,59
4,58
17,01
riskloans to price
weighted gross
index
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
31,00
N/A
14,40
N/A
30,70
26,30
N/A
20,20
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
15,80
N/A
1,90
N/A
15,60
17,20
N/A
2,10
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
Categories
Financial Depth
Financial Access
Private Bank
Stock market Stock
value
traded to
other
GDP (%)
US$ 4,085
financial
institutions
to GDP (%)
1 Cameroon
2 Côte d'Ivoire
3 Djibouti
4 Egypt
5 Guyana
6 Indonesia
7 Mauritania
8 Morocco
9 Nigeria
10 Pakistan
11 Senegal
12 Sudan
13 Syria
14 Uzbekistan
15 Yemen
11,11
17,17
N/A
32,32
34,87
26,28
24,58
72,20
31,29
21,03
24,54
10,93
20,43
N/A
5,95
17,80
20,33
N/A
65,37
52,51
31,86
20,82
85,04
32,95
29,40
28,96
14,53
50,78
N/A
19,99
N/A
28,07
N/A
39,68
13,84
39,46
N/A
N/A
19,55
19,81
N/A
N/A
N/A
N/A
N/A
Bank
accounts
per 1,000
adults
N/A
0,56
N/A
20,82
N/A
18,46
N/A
N/A
2,33
10,25
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
462,79
232,27
109,64
N/A
233,27
942,33
84,40
Bank
branches
per
100,000
adults
1,55
N/A
N/A
4,63
6,78
7,98
N/A
20,89
6,43
8,35
4,38
2,23
4,00
46,76
1,86
(%)
total
income
total
total
(%)
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
38
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
100,00
100,00
N/A
68,92
N/A
60,07
92,77
93,56
79,22
57,17
87,07
82,55
83,94
89,73
N/A
3,92
3,66
2,86
2,43
5,85
6,64
4,25
3,27
4,92
5,17
5,26
3,99
2,32
3,25
3,40
N/A
N/A
9,35
4,78
12,27
6,24
N/A
N/A
11,06
5,90
N/A
N/A
3,69
N/A
5,17
35,85
52,63
40,07
45,59
29,55
23,34
58,43
24,61
47,29
22,32
28,16
53,48
32,63
62,33
26,96
Financial Stability
Stock
Bank Zmarket score
turnover
ratio
(value
traded/cap
italization)
(%)
N/A
2,05
N/A
42,72
N/A
46,36
N/A
16,49
11,81
36,96
N/A
N/A
N/A
N/A
N/A
14,49
20,27
7,44
40,31
19,68
1,77
29,61
43,94
0,70
13,64
41,50
23,30
8,54
6,38
26,64
riskloans to price
weighted gross
index
N/A
N/A
N/A
16,30
N/A
17,20
N/A
12,30
7,00
14,00
18,20
N/A
N/A
23,40
N/A
N/A
N/A
N/A
13,60
N/A
2,60
N/A
4,40
20,10
14,70
20,20
N/A
N/A
1,00
N/A
N/A
N/A
N/A
31,24
N/A
33,20
N/A
N/A
29,00
28,12
N/A
N/A
N/A
N/A
N/A
Categories
Financial Depth
Financial Access
Private Bank
Stock market Stock
money
value
US$ 4,086 to
banks and
traded to
US$12,615
other
GDP (%)
financial
institutions
to GDP (%)
1 Albania
2 Algeria
3 Azerbaijan
4 Gabon
5 Iran
6 Iraq
7 Jordan
8 Kazakhstan
9 Lebanon
10 Libya
11 Malaysia
12 Maldives
13 Suriname
14 Tunisia
15 Turkey
16 Turkmenistan
35,34
14,60
16,67
8,09
34,80
7,13
67,47
41,05
69,16
N/A
105,06
86,01
22,92
62,83
38,19
N/A
57,82
42,44
10,87
15,77
22,76
32,36
91,20
30,31
212,96
N/A
119,42
71,47
37,50
50,45
48,60
N/A
N/A
N/A
N/A
N/A
N/A
N/A
118,36
40,28
33,27
N/A
138,86
N/A
N/A
21,73
37,18
N/A
Bank
accounts
per 1,000
adults
N/A
N/A
N/A
N/A
N/A
N/A
43,79
2,17
3,81
N/A
34,21
N/A
N/A
3,25
46,20
N/A
N/A
351,45
352,00
122,48
N/A
N/A
N/A
859,24
909,66
N/A
N/A
N/A
N/A
713,10
882,04
N/A
Bank
branches
per
100,000
adults
(%)
total
income
total
total
(%)
21,99
5,08
9,62
4,94
25,86
N/A
20,09
3,28
30,38
N/A
10,26
16,38
11,20
16,55
17,64
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
82,52
88,99
60,58
N/A
N/A
99,99
97,91
70,33
68,20
N/A
66,34
N/A
N/A
61,68
71,07
N/A
4,45
2,27
6,19
0,27
N/A
8,44
3,22
1,02
2,01
0,85
2,99
6,13
5,34
3,05
4,67
0,93
6,41
6,25
9,06
N/A
0,06
N/A
5,50
0,00
2,14
3,50
2,52
6,33
5,42
N/A
N/A
N/A
Financial Stability
Stock
Bank Zmarket score
turnover
ratio
(value
traded/cap
italization)
(%)
14,78
39,15
35,38
66,27
N/A
51,79
33,19
95,61
35,94
41,69
29,04
28,27
22,92
32,93
31,76
39,95
N/A
N/A
N/A
N/A
N/A
N/A
30,20
3,83
15,17
N/A
26,32
N/A
N/A
17,68
155,08
N/A
25,43
21,03
9,28
8,83
N/A
19,66
46,35
2,02
38,17
N/A
25,76
0,00
15,43
22,78
6,22
4,30
riskloans to price
weighted gross
index
15,40
N/A
N/A
22,60
N/A
N/A
20,30
17,90
13,40
N/A
17,50
N/A
N/A
N/A
19,00
N/A
14,00
N/A
N/A
9,90
N/A
N/A
8,20
23,80
4,30
N/A
3,40
N/A
N/A
N/A
3,50
N/A
N/A
N/A
N/A
N/A
N/A
N/A
19,16
39,63
16,34
N/A
16,58
N/A
N/A
12,35
37,53
N/A
Categories
Financial Depth
Financial Access
Private Bank
Stock market Stock
value
banks and
traded to
GDP (%)
financial
institutions
to GDP (%)
1 Bahrain
2 Brunei Darussalam
3 Kuwait
4 Oman
5 Qatar
6 Saudi Arabia
121,57
40,96
72,85
39,92
41,73
61,79
72,14
86,33
67,92
68,28
33,35
50,37
28,53
66,33
81,67
N/A
86,15
32,36
82,84
74,64
35,94
Bank
accounts
per 1,000
adults
2,51 N/A
N/A N/A
45,17 N/A
8,03 N/A
17,18 598,69
60,44 711,90
15,69 N/A
Bank
branches
per
100,000
adults
N/A
22,75
18,00
22,74
18,20
8,43
13,90
(%) total
income
total
total
(%)
N/A
N/A
N/A
N/A
N/A
N/A
N/A
39
N/A
N/A
N/A
N/A
N/A
N/A
N/A
93,87
N/A
N/A
100,00
93,59
77,81
79,47
2,07
6,22
3,01
3,69
3,20
2,89
3,04
6,02
5,03
2,58
3,47
4,37
N/A
N/A
26,67
39,48
30,64
24,49
29,38
31,07
30,47
Financial Stability
Stock
Bank Zmarket score
turnover
ratio
(value
traded/cap
italization)
(%)
1,53
N/A
39,03
18,28
17,36
60,39
25,65
19,12
7,02
19,02
14,40
26,25
14,64
22,14
riskloans to price
weighted gross
index
N/A
N/A
18,90
15,80
N/A
17,10
20,70
N/A
N/A
8,90
2,90
N/A
3,00
5,60
11,31
N/A
15,36
20,39
26,93
23,46
37,07
Categories
Low Income Group
US$ 1035 or less
1 Afghanistan
2 Bangladesh
3 Benin
4 Burkina Faso
5 Chad
6 Comoros
7 The Gambia
8 Guinea
9 Guinea-Bissau
10 Kyrgyz Republic
11 Mali
12 Mozambique
13 Niger
14 Sierra Leone
15 Tajikistan
16 Togo
17 Uganda
Financial Depth
Financial Access
Private
Bank
Stock market
money
banks and
other
financial
institutions
to GDP (%)
6,76
44,61
23,85
18,78
5,34
17,50
13,42
6,68
9,30
N/A
19,27
23,23
13,04
9,27
N/A
26,48
13,75
15,75
49,49
28,37
24,63
6,57
24,16
36,14
21,17
17,64
N/A
20,84
32,60
11,75
19,57
N/A
35,24
17,82
N/A
17,27
N/A
N/A
N/A
N/A
N/A
N/A
N/A
2,09
N/A
N/A
N/A
N/A
N/A
N/A
26,22
Stock
market
total
value
traded to
GDP (%)
Bank
accounts
per 1,000
adults
N/A
14,52
N/A
N/A
N/A
N/A
N/A
N/A
N/A
0,11
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
377,87
N/A
N/A
21,26
N/A
N/A
N/A
N/A
155,16
N/A
N/A
N/A
153,54
474,87
N/A
N/A
Bank
branches
per
100,000
adults
N/A
7,85
N/A
N/A
0,72
N/A
8,88
1,46
N/A
7,27
N/A
3,63
N/A
2,96
6,67
N/A
2,43
(%)
total
income
total
total
(%)
9,01
39,55
10,46
13,35
8,96
21,69
N/A
3,69
N/A
3,76
8,21
39,90
1,52
15,34
2,53
10,19
20,46
40
2,82
16,64
7,02
7,91
6,84
10,77
N/A
2,04
N/A
0,89
4,48
17,46
1,16
14,49
0,29
3,63
16,33
92,40
40,91
N/A
100,00
N/A
N/A
N/A
N/A
N/A
N/A
N/A
93,46
N/A
N/A
N/A
N/A
73,57
4,74
4,07
4,35
4,09
N/A
N/A
5,86
4,49
8,38
6,52
2,13
9,83
4,13
11,36
2,99
3,62
10,06
N/A
3,24
N/A
N/A
N/A
5,25
16,25
N/A
N/A
33,81
N/A
6,12
N/A
11,25
16,60
N/A
8,82
31,07
40,13
37,12
72,76
N/A
N/A
52,40
46,73
47,97
30,25
58,74
33,52
50,49
39,01
62,67
58,97
33,11
Financial Stability
Stock
Bank Zmarket score
turnover
ratio
(value
traded/cap
italization)
(%)
N/A
93,96
N/A
N/A
N/A
N/A
N/A
N/A
N/A
2,65
N/A
N/A
N/A
N/A
N/A
N/A
N/A
3,59
9,67
17,34
8,87
N/A
N/A
5,11
3,91
N/A
30,39
12,55
2,67
20,67
3,65
6,70
4,65
19,55
riskloans to price
weighted gross
index
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
30,30
N/A
17,10
N/A
27,00
25,30
N/A
20,30
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
10,20
N/A
2,60
N/A
15,10
14,90
N/A
2,20
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
Categories
Financial Depth
Financial Access
Private Bank
Stock market Stock
value
traded to
other
GDP (%)
US$ 4,085
financial
institutions
to GDP (%)
1 Cameroon
2 Côte d'Ivoire
3 Djibouti
4 Egypt
5 Guyana
6 Indonesia
7 Mauritania
8 Morocco
9 Nigeria
10 Pakistan
11 Senegal
12 Sudan
13 Syria
14 Uzbekistan
15 Yemen
12,20
19,29
N/A
30,37
35,46
28,25
24,17
68,72
22,91
18,05
27,03
N/A
N/A
N/A
5,50
18,55
25,99
N/A
62,26
52,61
31,95
21,40
87,49
29,68
27,50
30,77
N/A
N/A
N/A
19,61
N/A
28,85
N/A
27,76
N/A
45,06
N/A
N/A
17,30
16,85
N/A
N/A
N/A
N/A
N/A
Bank
accounts
per 1,000
adults
N/A
0,55
N/A
12,51
N/A
16,16
N/A
N/A
1,81
5,49
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
506,70
256,63
152,17
N/A
N/A
959,20
90,31
Bank
branches
per
100,000
adults
1,66
N/A
N/A
N/A
7,58
8,52
N/A
22,31
6,44
8,74
4,72
2,37
N/A
47,73
1,84
(%)
total
income
total
total
(%)
14,81
N/A
12,27
9,72
N/A
19,58
17,46
39,07
29,67
10,31
5,82
6,90
23,25
22,50
3,66
41
9,94
N/A
3,35
0,69
N/A
15,29
6,41
12,24
23,59
1,44
3,72
3,41
5,06
0,82
1,07
N/A
100,00
N/A
75,11
N/A
59,55
N/A
N/A
66,67
56,89
100,00
100,00
100,00
90,49
N/A
2,58
4,03
2,86
2,37
5,94
6,32
2,28
1,89
7,62
5,42
3,63
4,09
2,53
3,74
4,20
N/A
N/A
9,10
4,29
12,51
5,47
N/A
N/A
10,32
6,19
N/A
N/A
N/A
N/A
5,00
39,50
51,95
47,98
27,91
26,20
23,23
58,79
38,70
34,64
21,21
52,01
49,07
43,69
60,25
30,65
Financial Stability
Stock
Bank Zmarket score
turnover
ratio
(value
traded/cap
italization)
(%)
N/A
1,78
N/A
34,51
N/A
36,59
N/A
9,54
9,84
28,62
N/A
N/A
N/A
N/A
N/A
13,61
21,99
10,27
38,53
19,36
1,88
35,82
38,25
3,77
13,90
38,42
14,95
8,97
5,63
30,30
riskloans to price
weighted gross
index
N/A
N/A
N/A
16,40
N/A
16,10
N/A
N/A
9,90
14,60
N/A
N/A
N/A
24,20
N/A
N/A
N/A
N/A
11,00
N/A
2,20
N/A
4,90
11,60
16,20
N/A
N/A
N/A
0,70
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
Categories
Financial Depth
Financial Access
Private Bank
Stock market Stock
money
value
US$ 4,086 to
banks and
traded to
US$12,615
other
GDP (%)
financial
institutions
to GDP (%)
1 Albania
2 Algeria
3 Azerbaijan
4 Gabon
5 Iran
6 Iraq
7 Jordan
8 Kazakhstan
9 Lebanon
10 Libya
11 Malaysia
12 Maldives
13 Suriname
14 Tunisia
15 Turkey
16 Turkmenistan
37,23
14,20
16,50
7,86
N/A
N/A
69,71
34,87
70,34
N/A
106,40
81,01
N/A
71,17
43,17
N/A
63,42
42,44
11,74
16,41
N/A
N/A
95,59
27,47
199,71
N/A
120,93
79,30
N/A
53,49
46,73
N/A
N/A
N/A
N/A
N/A
N/A
N/A
100,13
28,49
26,12
N/A
144,09
N/A
N/A
22,21
30,99
N/A
Bank
accounts
per 1,000
adults
N/A
N/A
N/A
N/A
N/A
N/A
23,36
0,93
2,75
N/A
38,90
N/A
N/A
3,09
50,92
N/A
N/A
372,90
398,21
131,12
N/A
N/A
N/A
N/A
948,97
N/A
N/A
N/A
N/A
757,37
922,00
N/A
Bank
branches
per
100,000
adults
(%)
total
income
total
total
(%)
22,20
5,28
9,91
5,77
29,53
N/A
21,07
3,38
31,52
N/A
10,49
17,25
11,20
17,22
18,33
N/A
28,27
33,29
14,90
18,95
73,68
10,55
25,47
42,11
37,03
N/A
66,17
N/A
N/A
32,19
57,60
0,40
8,56
4,33
1,61
8,66
19,71
5,44
8,26
6,74
17,11
N/A
35,41
N/A
N/A
4,96
4,17
0,12
94,77
91,25
80,63
N/A
N/A
99,99
97,89
72,44
77,61
N/A
63,69
N/A
N/A
68,18
70,10
N/A
4,27
2,24
5,02
7,98
N/A
4,19
3,15
2,94
2,02
N/A
2,60
7,06
4,10
2,68
3,65
0,44
6,57
6,25
8,11
N/A
N/A
N/A
5,32
N/A
1,64
3,50
2,00
6,02
5,37
N/A
N/A
N/A
Financial Stability
Stock
Bank Zmarket score
turnover
ratio
(value
traded/cap
italization)
(%)
14,09
41,31
31,33
65,15
N/A
69,97
33,21
29,52
37,15
N/A
31,04
40,07
23,11
35,38
33,73
56,12
N/A
N/A
N/A
N/A
N/A
N/A
13,93
2,03
4,88
N/A
31,07
N/A
N/A
10,96
172,24
N/A
26,60
21,86
9,68
7,92
N/A
24,77
46,26
0,14
34,35
N/A
25,09
N/A
14,78
23,54
5,31
2,80
riskloans to price
weighted gross
index
15,60
N/A
N/A
16,40
N/A
N/A
18,20
17,40
12,10
N/A
17,70
N/A
N/A
N/A
16,50
N/A
18,80
N/A
N/A
5,50
N/A
N/A
8,50
30,80
3,80
N/A
2,70
N/A
N/A
N/A
2,70
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
Categories
Financial Depth
Financial Access
Private Bank
Stock market Stock
value
banks and
traded to
GDP (%)
financial
institutions
to GDP (%)
1 Bahrain
2 Brunei Darussalam
3 Kuwait
4 Oman
5 Qatar
6 Saudi Arabia
N/A
32,84
54,84
36,79
35,46
52,44
60,78
N/A
60,40
52,67
30,65
44,62
27,01
57,80
N/A
N/A
63,64
27,90
72,23
60,05
27,43
Bank
accounts
per 1,000
adults
N/A N/A
N/A N/A
18,39 N/A
4,19 N/A
12,01 673,30
42,82 749,39
5,98 N/A
Bank
branches
per
100,000
adults
N/A
23,09
19,40
23,63
17,81
8,73
14,47
(%) total
income
total
total
(%)
64,51
N/A
86,77
73,60
65,88
46,42
59,73
42
16,29
N/A
40,35
22,62
25,38
17,24
19,16
95,58
N/A
100,00
100,00
96,38
78,20
81,13
2,13
5,48
3,07
3,49
3,26
2,80
3,17
5,77
5,10
3,01
3,39
3,74
N/A
N/A
33,54
40,09
28,28
27,37
26,44
31,69
27,48
Financial Stability
Stock
Bank Zmarket score
turnover
ratio
(value
traded/cap
italization)
(%)
N/A
N/A
19,04
12,86
18,51
84,58
16,02
18,26
5,45
19,24
12,78
28,51
15,09
22,52
riskloans to price
weighted gross
index
N/A
N/A
N/A
14,30
N/A
17,30
21,20
N/A
N/A
N/A
2,70
N/A
N/A
6,20
N/A
N/A
N/A
N/A
N/A
N/A
N/A
DEFINITIONS OF SELECTED FINANCIAL BENCHMARKING DATA 29
Financial Depth
Private Credit by Deposit Money Banks and
Other Financial Institutions to GDP (%)
Private credit by deposit money banks and other
financial institutions to GDP.
Bank Deposits to GDP (%)
The total value of demand, time and saving
deposits at domestic deposit money banks as a
share of GDP. Deposit money banks comprise
commercial banks and other financial institutions
that accept transferable deposits, such as demand
deposits.
Stock Market Capitalization to GDP (%)
Total value of all listed shares in a stock market as
a percentage of GDP.
Stock Market Total Value Traded to GDP (%)
Total value of all traded shares in a stock market
exchange as a percentage of GDP.
Financial Access
Bank Accounts per 1,000 Adults
Number of depositors with commercial banks per
1,000 adults. The data is from commercial banksbank survey.
Bank Branches per 100,000 Adults
Number of commercial bank branches per 100,000
adults. The data is from commercial banks-bank
survey.
Adults with an Account at a Formal Financial
Institution to Total Adults (%)
The-percentage of adults with an account (self or
together with someone else) at a bank, credit
union, another financial institution (e.g.,
cooperative, microfinance institution), or the post
office (if applicable) including adults who reported
having a debit card to total adults.
Adults Saving at a Financial Institution in the
Past Year to Total Adults (%)
The percentage of adults who report saving or
setting aside any money using an account at a
formal financial institution such as a bank, credit
union, microfinance institution, or cooperative in
the past 12 months.
29
World Bank Global Financial Development Database
43
5-Bank Asset Concentration
Net Interest Margin (%)
The assets of the five largest banks as a share of
total commercial banking assets. Total assets
include total earning assets, cash and due from
banks, foreclosed real estate, fixed assets, goodwill,
other intangibles, current tax assets, deferred tax,
discontinued operations and other assets.
The accounting value of bank's net interest
revenue as a share of its average interest-bearing
(total earning) assets.
Lending-Deposit Spread (%)
The difference between lending rate and deposit
rate. Lending rate is the rate charged by banks on
loans to the private sector and deposit interest rate
is the rate offered by commercial banks on threemonth deposits.
Non-Interest Income to Total Income
The bank’s income that has been generated by noninterest related activities as a percentage of total
income (net-interest income plus non-interest
income). Non-interest related income includes net
gains on trading and derivatives, net gains on other
securities, net fees and commissions and other
operating income.
Stock Market Turnover Ratio (value
traded/capitalization) (%)
The total value of shares traded during the period
divided by the average market capitalization for
the period.
Financial Stability
Bank Z-Score
Capital Adequacy Ratio
It captures the probability of default of a country's
banking system. Z-score compares the buffer of a
country's banking system (capitalization and
returns) with the volatility of those returns.
The capital adequacy of deposit takers. It is a ratio
of total regulatory capital to its assets held,
weighted according to risk of those assets.
Bank Non-Performing Loans to Gross Loans (%) Ratio of defaulting loans (payments of interest and
principal past due by 90 days or more) to total
gross loans (total value of loan portfolio). The loan
amount recorded as nonperforming includes the
gross value of the loan as recorded on the balance
44
sheet, not just the amount that is overdue.
Volatility of Stock Price Index
Volatility of stock price index is the 360-day
standard deviation of the return on the national
stock market index.
45
REFERENCES
European Central Bank, Islamic Finance in Europe, June 2013
Islamic Development Bank, Annual Report 2012, March 2013
The World Bank, Global Financial Development Report, 2013
The World Bank, World Development Indicators, 2013
The World Bank, Finance for All? Policies and Pitfalls in Expanding Access, Demirgüç-Kunt, Beck,
and Honohan, 2008
The World Bank Financial Development Database, 2013
http://databank.worldbank.org/data/views/variableselection/selectvariables.aspx?source=glob
al-financial-development
Islamic Research & training Institute (IRTI), Role of Microfinance in Poverty Alleviation,
Mohammed Obaidullah, 2008
UN, World Economic Situation and Prospects, 2012
The World Bank, Benchmarking Financial Systems around the World, 2012
IMF, World Economic Outlook, 2013
IMF, Global Financial Stability Report, 2013
IMF, Financial Systems Soundness Indicators, 2013
SESRIC
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Financial Outlook of the OIC Member Countries

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