Making Cooperation Work COMCEC STRATEGY€¦ · Making Cooperation Work Selected Financial Data...

1st Meeting of COMCEC Finance Working Group

Fırat YILMAZ

December 12th, 2013

Ankara, Turkey

Making Cooperation Work

For Building an Interdependent Islamic World

COMCEC

FINANCIAL OUTLOOK

COMCEC STRATEGY

2For Building an Interdependent Islamic World

COMCEC STRATEGYMaking Cooperation Work

OUTLINE

Recent Financial Developments in the Global

Financial System

Financial Outlook of COMCEC Region

RECENT FINANCIAL

DEVELOPMENTS

Non-stop quantitative

easing

Persistent low yields

Buoyancy in US

economy

High asset

prices until

May 2013

A signal of tapering

asset purchase program

Serious capital

outflows with a

slowing growth

Recent Financial Developments

Since 2008

The FED’s Signal

What happened in

May 2013

Recent Financial Developments

Real GDP Growth Rates

2009 2010 2011 2012 2013

Advanced economies Emerging market and developing economies OIC World

Source: Calculated by using IMF Database

Souce: IMF World Economic Outlook

Economic Growth Rates (Forecast)

2,7%2,9%3,1%3,3%3,5%3,7%3,9%4,1%4,3%

2013 2014

Global Growth Rate (%)

2012 Sept Forecast 2013 Sept Forecast

2013 2014

Euro Area Growth Rate (%)

4,3%4,5%4,7%4,9%5,1%5,3%5,5%5,7%5,9%6,1%

2013 2014

Developing Countries Growth Rate (%)

1,4%1,6%1,8%2,0%2,2%2,4%2,6%2,8%3,0%3,2%

2013 2014

U.S.A. Growth Rate (%)

FINANCIAL OUTLOOK OF

COMCEC REGION

FINANCIAL DEPTH

• Measures the size of financial institutions and markets

FINANCIAL ACCESS

• Measures to the degree to which individuals can use financial institutions and markets

FINANCIAL EFFICIENCY

• Measures the efficiency of financial institutions and markets in providing financial services

FINANCIAL STABILITY

• Measures the stability of financial institutions and markets

Selected Financial Data

FINANCIAL INSTITUTION FINANCIAL MARKETS

DEPTH Private Sector Credit to GDP Deposits to GDP

Stock Market Capitalization Stock Traded 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

Stock Market Turnover Ratio

STABILITY Z-Score Capital Adequacy Ratios Non-Performing loans (%)

Volatility of Stock Price

Source: World Bank

Categorization Of COMCEC 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

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

OIC-Upper middle income

US$ 4,086 to US$12,615

Albania, Algeria, Azerbaijan, Gabon, Islamic Republic of Iran, Iraq, Jordan, Kazakhstan, Lebanon, Libya, Malaysia, Maldives, Suriname, Tunisia, Turkey, Turkmenistan

OIC-High income group US$ 12,616 or more

Bahrain, Brunei Darussalam, Kuwait, Oman, Qatar, Saudi Arabia, United Arab Emirates

Source: World Bank

FINANCIAL DEPTH

FINANCIAL ACCESS

FINANCIAL STABILITY

FINANCIAL DEPTH

FINANCIAL ACCESS

FINANCIAL STABILITY

FINANCIAL DEPTH

Private Credit to GDP Ratio

Bank Deposits to GDP Ratio

Stock Market Capitalization toGDP

OIC-LIG OIC-LMIG OIC-UMIG OIC-HIGH WORLD Average OIC Average

Private Credit to GDP Ratios

Source: Calculated by using World Bank Database

Bank Deposits to GDP Ratios

Stock Market Capitalization to GDP

Analysis of Financial Depth

MOZNGA

0 20 40 60 80 100

Private credit to GDP (%)

FINANCIAL DEPTH

FINANCIAL ACCESS

FINANCIAL STABILITY

FINANCIAL ACCESS

Bank Accounts per 1,000Adults

Bank Branches per100,000 Adults

Adults Saving at aFinancial Institution

Bank Accounts per 1,000 Adults

Bank Branches per 100,000 Adults

Adults Saving at a Financial Institution to Total Adults

MARMOZ

SENSDN

YEM0,0%

100,0%

120,0%

0 10 20 30 40 50 60

Bank branches per 100,000 adults Source: Calculated by using World Bank Database

Analysis of Financial Access

Analysis of Financial Depth and Access

GABGIN

0% 5% 10% 15% 20% 25% 30% 35% 40% 45%

Adults saving at a fin. inst. in the past year to total adults (%)

FINANCIAL DEPTH

FINANCIAL ACCESS

FINANCIAL STABILITY

FINANCIAL EFICIENCY

Net Interest Margin

Stock Market Turnover Ratio

Net Interest Margin Rates

Stock Market Turnover Ratio, 2011

BGD (LIG)

CIV (LMIG)

EGY (LMIG)

IDN (LMIG)

JOR (UMIG)

KAZ (UMIG)

KWT (HIGH)

KGZ (LIG)

LBN (UMIG)

MYS (UMIG)

MAR (LMIG)

NGA (LMIG)

OMN (HIGH)

PAK (LMIG)

QAT (HIGH)

SAU (HIGH)

TUN (UMIG)

UAE (HIGH)

lizati

FINANCIAL DEPTH

FINANCIAL ACCESS

FINANCIAL STABILITY

Z-Score

Non-Performing Loans

Capital Adequacy Ratio

Z-Scores

Non-Performing Loans (NPL)

Capital Adequacy Ratios

ALB (UMIG)

EGY (LMIG)

GAB (UMIG)

IDN (UMIG)

JOR (UMIG)KAZ (UMIG)

KGZ (LIG)

LBN (UMIG)

MYS (UMIG)

MOZ (LIG)

NGA (LMIG)

OMN (HIGH)

PAK (LMIG)

SAU (HIGH)

SLE (LIG)

TJK (LIG)

TUR (UMIG)

UGA (LIG)

UAE (HIGH)

UZB (LMIG)

Scatter Plot Analysis of Financial Stability and Depth

MOZ NGA

0 5 10 15 20 25 30 35

Bank non-performing loans to gross loans (%)

Overall AssessmentFinancial Depth Financial Access Financial Efficiency Financial Stability

OIC-LIG • Limited private

credit opportunities

• Underdeveloped

banking sector and

security market

• Lower access to

financial services

• Low saving rates

• Higher

transaction/intermediation

• Limited liquidity in the

security market

• Higher NPLs

• Higher probability

of insolvency

OIC-LMIG • Underdeveloped

banking sector and

security market

• Lower access to

financial services

• Lower saving

• Transaction/intermediation

costs in line with world

average

• Higher NPLs

OIC-UMIG • Better developed

banking sector and

security market

• Lower saving

• Usually low volumes of

stock market in many

countries

• Higher NPLs

OIC-HIGH • Better developed

banking sector and

security market

• Better access to

financial services

• Higher saving

• Usually low volumes of

stock market in many

countries

• Lower transaction/

intermediation cost

• More resilient to

shocks

• Lower NPLs

Thank You

Making Cooperation Work

For Building an Interdependent Islamic WorldCOMCEC STRATEGY

December 12th, 2013

Ankara, Turkey

1st Meeting of COMCEC Finance Working Group

Making Cooperation Work COMCEC STRATEGY€¦ · Making Cooperation Work Selected Financial Data...

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