gcc economic & banking system outlook & trade finance capabilities

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GCC Economic & Banking system outlook & Trade Finance Capabilities September 2013 Frank Haak, Transaction Bank Group BNP Paribas Fortis

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GCC Economic & Banking system outlook & Trade Finance Capabilities. September 2013 Frank Haak, Transaction Bank Group BNP Paribas Fortis. Gulf Cooperation Council (GCC). GCC Outlook. elevated public spending - forecast to rise 6-7 % in 2013-2014 improving private sector conditions - PowerPoint PPT Presentation

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Page 1: GCC Economic & Banking system outlook & Trade Finance Capabilities

GCC

Economic & Banking system outlook &Trade Finance Capabilities

September 2013

Frank Haak, Transaction Bank GroupBNP Paribas Fortis

Page 2: GCC Economic & Banking system outlook & Trade Finance Capabilities

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Gulf Cooperation Council (GCC)

Page 3: GCC Economic & Banking system outlook & Trade Finance Capabilities

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GCC Outlook

• elevated public spending - forecast to rise 6-7 % in 2013-2014

• improving private sector conditions

• overall economic growth 4 % (non-oil 6 %) in 2013-1H2014

• GCC inflation remains low at 2-3 % in 2013-2014

• fiscal surplus decline from 12 % of GDP in 2012 to 5 % in 2014

• GCC needs to address job creation & fiscal reforms

Page 4: GCC Economic & Banking system outlook & Trade Finance Capabilities

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Country by country

Bahrain

- Restored oil output & high government spending to drive faster growth

- GDP growth forecasts: 4.6 % in 2013 - 3.8 % in 2014

- Budget deficit to widen further

Kuwait

- Growth supported by strong consumer sector – high oil revenues – hope for improvement in execution of government projects

- GDP growth forecasts: 1.3 % in 2013 - 2.9 % in 2014

Oman

- Elevated levels of public spending – sectors like transport/trade/tourism perform very well

- GDP growth forecasts: 4.4 % in 2013 – 3.4 % in 2014

- Rapid population growth – job creation high on government’s agenda

Page 5: GCC Economic & Banking system outlook & Trade Finance Capabilities

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Country by country - continued

Qatar

- Robust non-hydrocarbon growth as a result of the government’s investment program (USD 200 billion development spendings)

- Rising rents drive inflation (forecasts 2013 => 3.4 % and 2014 => 4 %) / current account surplus reduction / fiscal space narrows

- GDP growth forecasts remain high: 5.7 % in 2013 – 6.2 % in 2014

Saudi Arabia

- Non-oil growth moderates – also government spending growth may be entering a softer phase… but will remain at solid levels

- Noticed the highest GDP growths of the GCC in 2012 (oil & non-oil)

- Inflation & budget surplus remain under control

UAE

- Further signs of economic recovery – took advantage of its ‘safe heaven’ status in the MENA region

- Strong trade ties with emerging markets in Asia – important role for the upcoming African markets

- Real estate sector in Dubai appears to have turned a corner with higher levels of buyer/investor interests

- GDP growth forecasts: 2.7 % in 2013 – 2.1 % in 2014

- Reduction in government bailout spending

Page 6: GCC Economic & Banking system outlook & Trade Finance Capabilities

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Saudi Arabia

1.Banking system:strong banking system – support authorities “systemic banks” Private sector credit growth eases but remains solid – liquid banking systemL/C and L/G heavily used

2. BNP Paribas Fortis offers in trade:Confirmation of L/Cs and re-issuance of L/Gs on 15 banks (main players are

National Commercial Bank, Arab National Bank, Banque Saudi Fransi, Samba Bank, Riyad Bank, Saudi British Bank, Saudi Hollandi Bank, Al Rahji Bank)

open and silent confirmation all-in duration of 36 months - longer tenors case by case BNP Paribas has branch in Riyadh.

Page 7: GCC Economic & Banking system outlook & Trade Finance Capabilities

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Bahrain

1. Banking system:two banking systems (local retail banks & offshore banks)Banking system is recovering but political uncertainty has its impactL/C and L/G heavily used

2. BNP Paribas Fortis offers in trade:Confirmation of L/Cs and re-issuance of L/Gs on 7 banks (main banks: Ahli United

Bank, Arab Banking Corporation, Bank of Bahrain and Kuwait, Gulf International Bank, National Bank of Bahrain)

open and silent confirmation all-in duration of 36 months - longer duration case by caseBNP Paribas Bahrain branch is the hub for BNP Paribas’ network in the GCC

Page 8: GCC Economic & Banking system outlook & Trade Finance Capabilities

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Kuwait

1. Banking system:banks have beside NPL also important amount of restructured loans (part of it

on investment companies and indirectly in real estate – takes time to digest…) Credit growth improved, but softer than most other Gulf countriesL/C and L/G heavily used

2. BNP Paribas Fortis offers in trade:Confirmation of L/Cs and re-issuance of L/Gs on 12 banks (main banks are

National Bank of Kuwait, Al Ahli Bank of Kuwait, Commercial Bank of Kuwait, Ahli United Bank, Burgan Bank, Industrial Bank of Kuwait, Kuwait Finance House, Gulf Bank)

open and silent confirmation all-in duration of 36 months - longer tenors case by caseBNP Paribas has branch in Kuwait

Page 9: GCC Economic & Banking system outlook & Trade Finance Capabilities

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Oman - Qatar

1. Banking system:well capitalized/monitored banking systemsPublic sector drives deposits and credit growth Focus on liquidity management by financial authorities

2. BNP Paribas Fortis offers in trade:Confirmation of L/Cs and re-issuance of L/Gs on 7 Omani (main banks in Oman are

Bank Muscat, National Bank of Oman, Oman International Bank, Bank Dhofar, Oman Arab Bank) and 9 Qatari bank (main banks in Qatar are Commercial Bank of Qatar, Doha Bank, Qatar National Bank, International Bank of Qatar, Ahli Bank QSC, Al Khalij Commercial Bank, Qatar Islamic Bank, Qatar International Islamic Bank)

open and silent confirmationall-in duration of 36 months - longer tenors case by caseBNP Paribas has branch in Qatar

Page 10: GCC Economic & Banking system outlook & Trade Finance Capabilities

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United Arab Emirates (UAE)

1. Banking system:Abu Dhabi based banks are better capitalized & government support is a factsome Dubai banks still have important restructured loansBank lending remains weak & liquidity management high on the agendaGovernment issues tighter lending restrictions to prevent property market

speculation (lesson from the past)

2. BNP Paribas Fortis offers in trade:Confirmation of L/Cs & re-issuance of L/Gs on 20 UAE based banks

- main Abu Dhabi banks are National Bank of Abu Dhabi, Abu Dhabi Commercial Bank, First Gulf Bank, Union National Bank

- main Dubai banks are Emirates-NBD Bank, Mashreq, Commercial Bank of Dubai- main other Emirates based banks are National Bank of Fujairah, Bank of Sharjah, National

Bank of Umm Al Qaiwain, National Bank of Ras Al-Khaimah

open/silent with all-in duration of 36 months - longer tenors case by caseBNP Paribas has operations in UAE (Abu Dhabi, Dubai)

Page 11: GCC Economic & Banking system outlook & Trade Finance Capabilities

Network of Trade Finance experts around the world Dedicated sales force: more than 250 professionals addressing mainly 15,000 clients Global synergy across the bank’s entire network.

Page 12: GCC Economic & Banking system outlook & Trade Finance Capabilities

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Any import/export need with any GCC country can be handled by

BNP PARIBAS FORTIS with thanks for your attention