PMA Issues an Abstract Statement on the Performance of the Banking System During July 2012

The Inspection and Supervision Department at the PMA issued an abstract statement on the performance of the banking system for the first seven months of the current year. The report contained information on the volume of credit, ratio of outside placements and investments, value of the banking system’s assets, total volume of deposits, and total owners’ equity. The volume of credit reached record levels as credit ratio comprised 55.4 percent of customers’ deposits. The ratio of outside placements & investments rose to 37.6 percent of total deposits. Total paid-up capital stabilized at 900m USD while Owners’ equity rose by about 27.9m USD reaching 1.22 billion USD that primarily resulted from the 72.4m USD rise in the realized profits during the first seven months of the current year.

9 billion USD banking system assets and rise in volume of credit

The assets of the banking system dropped during July by about 96.2m USD (1.1 percent) to 8.95 billion USD. According to data analysis, banks placements at PMA dropped by approximately 68.2m USD and the volume of credit by 38.9m USD (1.0 percent) to about 3.81 billion USD the reported drop of credit volume was due to the decrease of credit facilities granted to the public sector by 68.3m USD (5.7 percent) reaching about 1.136m USD, and the increase of credit facilities granted to the private sector by 29.3m USD reaching 2,674m USD. Thus, comprising 71.2 percent of total credit facilities compared with 29.8 percent for the public sector.

Drop in credit ratio and rise in cash holdings in banks

As a result of the above, the credit ratio dropped from 55.7 percent to 55.4 percent by the end of July 2012. This concurred with a drop in investments in the stocks and securities portfolio by about 15.8m USD reaching 957.2m USD. Whereas banks’ placements outside Palestine rose by37.5m USD which led to a rise of outside placements and Investments by 25.5m USD (0.9 percent) to almost 2,780m USD, comprising 37.6 percent of total deposits compared with 36.8 percent at the end of June.

Drop in volume of deposits

With regard to the liabilities’ side, Total deposits and customers’ deposits witnessed a decrease by almost 101.4m USD (1.4 percent) and 32.9m USD (0.5 percent) respectively. The total volume of total deposits reached 7.39 billion USD by the end of July 2012 with customers’ deposits comprising 6.88 billion USD at the ratio of 93 percent. 

Capital resources and profitability

Decrease

The banking system’s Owners’ equity rose by 10.4m USD (0.2 percent) to 1.22m USD. This resulted in a rise in realized profits by almost 10.9m USD to 72.4m USD, while paid-up capital stabilized at 900m USD.

It’s worth mentioning that there are 18 banks operating in Palestine, as the Palestinian banking system consists of 8 national banks, 8 Jordanian banks, 1 Egyptian bank and 1 British bank. All banks operate through a network of 230 branches and offices distributed all over WBG.