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

2013

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

-4%

-2%

0%

2%

4%

6%

8%

10%

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)

3,6%

4,1%

2,9%

3,6%

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

0,2%

1,2%

-0,4%

1,0%

-1,0%

-0,5%

0,0%

0,5%

1,0%

1,5%

2013 2014

Euro Area Growth Rate (%)


5,6%

5,9%

4,5%

5,1%

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 (%)


2,1%

2,9%

1,6%

2,6%

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 (%)


7



FINANCIAL OUTLOOK OF

COMCEC REGION

8



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

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

15

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

16

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

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

7

Source: World Bank



FINANCIAL DEPTH

FINANCIAL ACCESS


FINANCIAL STABILITY



FINANCIAL DEPTH

Private Credit to GDP Ratio

Bank Deposits to GDP Ratio

Stock Market Capitalization toGDP



0%

10%

20%

30%

40%

50%

60%

70%

80%

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

2009

2010

2011

Private Credit to GDP Ratios

Source: Calculated by using World Bank Database



0%

10%

20%

30%

40%

50%

60%

70%

80%


2009

2010

2011

Bank Deposits to GDP Ratios




0%

10%

20%

30%

40%

50%

60%

70%

80%


2009

2010

2011

Stock Market Capitalization to GDP




Analysis of Financial Depth

AFG

ALB

DZA

AZE

BGD

BEN

BRN

CMR

TCD

COM

CIV

EGY

GAB

GUY

IDN

JOR

KAZ

KWT

LBN

MYS

MDV

MLI

MAR

MOZNGA

OMN

PAK

QAT

SAU

SEN

SLE

GMB

TUN

TUR

UGA

UAE

YEM

0

20

40

60

80

100

120

140

0 20 40 60 80 100

Private credit to GDP (%)

Ban

k d

ep

osi

ts t

o G

DP

(%

)


2011



FINANCIAL DEPTH

FINANCIAL ACCESS


FINANCIAL STABILITY



FINANCIAL ACCESS

Bank Accounts per 1,000Adults

Bank Branches per100,000 Adults

Adults Saving at aFinancial Institution



0

100

200

300

400

500

600

700

800


2009

2010

2011


Bank Accounts per 1,000 Adults



Bank Branches per 100,000 Adults

0

2

4

6

8

10

12

14

16

18

20


2009

2010

2011




Adults Saving at a Financial Institution to Total Adults


0%

5%

10%

15%

20%

25%


2011



ALB

DZA

AZE

BGD

CMR

TCD

GAB

GIN

IDN

IRN

JOR

KAZ

KWT

KGZ

LBN

MYS

MARMOZ

NGA

OMN

PAK

QAT

SAU

SENSDN

TJK

TUN

TUR

UGA

UAE

UZB

YEM0,0%

20,0%

40,0%

60,0%

80,0%

100,0%

120,0%

0 10 20 30 40 50 60

Ad

ult

s w

ith

an

acc

ou

nt

at a

fo

rmal

fin

. in

st. t

o t

ota

l ad

ult

s (%

)

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

Analysis of Financial Access

2011




Analysis of Financial Depth and Access

AFG

ALB

DZA

AZE

BGD

BEN

BFA

CMR

TCD

COM

EGY

GABGIN

IDN

JOR

KAZ

KWT

LBN

MYS

MLI

MRT

MAR

MOZ

NER

NGA

OMN

PAK

QAT

SAU

SEN

SLE

TUN

TUR

UGA

UAE

YEM

0%

20%

40%

60%

80%

100%

120%

140%

160%

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

Ban

k d

ep

osit

s t

o G

DP

(%

)

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

2011



FINANCIAL DEPTH

FINANCIAL ACCESS


FINANCIAL STABILITY



FINANCIAL EFICIENCY

Net Interest Margin

Stock Market Turnover Ratio



Net Interest Margin Rates

0%

1%

2%

3%

4%

5%

6%

7%

8%


2009

2010

2011




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)

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Sto

ck

ma

rke

t tu

rno

ve

r ra

tio

(va

lue

tra

de

d/c

ap

ita

lizati

on

) (%

)

2011



FINANCIAL DEPTH

FINANCIAL ACCESS


FINANCIAL STABILITY



FINANCIAL STABILITY

Z-Score

Non-Performing Loans

Capital Adequacy Ratio



Z-Scores

0

5

10

15

20

25


2009

2010

2011




0%

2%

4%

6%

8%

10%

12%

14%


2009

2010

2011

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)

0%

5%

10%

15%

20%

25%

30%

35%

Cap

ital

Ad

eq

uac

y R

atio

s (%

)

2011



Scatter Plot Analysis of Financial Stability and Depth


ALB

EGY

GAB

IDN

JOR

KAZ

LBN

MYS

MAR

MOZ NGA

OMN

PAK

SLE

TUR

UGA

UAE

0

20

40

60

80

100

120

0 5 10 15 20 25 30 35

Pri

vate

cre

dit

by d

ep

osit

mo

ney b

an

ks a

nd

oth

er

fin

an

cia

l in

sti

tuti

on

s t

o G

DP

(%

)

Bank non-performing loans to gross loans (%)

2011



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

costs

• 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

rates

• Transaction/intermediation

costs in line with world

average

• Higher NPLs

OIC-UMIG • Better developed

banking sector and

security market

• Lower saving

rates

• 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

rates

• 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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