BEIRUT (AP)- Bank deposits in the Arab world are on track to grow over 40 percent, topping $1.8 trillion by the end of the year, the head of the Union of Arab Banks said Thursday.
Adnan Youssif said the increase in deposits came as regional banks avoided “dangerous investments and complicated on obscure operations” that battered world financial markets in 2008.
Arab banks had little exposure to the subprime mortgagees and other risky investments that triggered the global financial crisis. A number of Gulf Arab banks, however, have booked higher provisions amid lingering concerns about the fallout from Dubai’s debt woes and analysts say the true extend of some banks’ exposure to bad loans is not yet entirely clear.
The stringent lending requirements laid down by many of the region’s banks, however, also mean that access to credit is often severely limited for companies and individuals.
Youssif, speaking at the UAB’s annual meeting, said Arab banks’ assets are projected to climb to $3 trillion by the end of 2010, much higher than the combined gross domestic product of $2 trillion of the 22 Arab nations.
“The Arab banking sector is bigger than the size of the Arab economy,” Youssif said, adding that the amount of loans given by the banks to the private and public sector stands at $1.5 trillion.
Joseph Torbey, the chairman of the World Union of Arab Bankers, said the success of Arab banks requires “a more efficient participation in drafting major financial, monetary and economic decisions issued by international institutions such as the IMF and World Bank.”
The opening session of the conference was attended by visiting Turkish Prime Minister Recep Tayyip Erdogan who called for closer cooperation between his country and Arab states.