Palestinian credit bureau helps banks’ profits
Bank lending $2.8 bln in 8 months, vs yr-ago $2.23 bln.
October 7, 2010 2:43 by Reuters
A new credit bureau opened by the Palestine Monetary Authority (PMA) has helped banks increase profits by 54 percent in the past eight months, a top regulator said on Thursday.
Banks are lending more, thanks to the bureau, which in turn has helped their profits, said Riyad Abu Shehadeh, director of supervision and inspection department at the PMA. New branches in rural areas have also helped business, he said.
The 19 banks operating in the Palestinian territories, with 210 branches and total assets of $8 billion, lent $2.8 billion in the first eight months of 2010, compared with $2.23 billion in the year-ago period, Abu Shehadeh said.
The banks made $99 million in net profit during the first eight months, up from $64 million in the same period of 2009. Total deposits reached $6.4 billion.
“Introducing the credit bureau has significantly helped banks to quickly earn profits they did not make in the past,” Abu Shehadeh said. Bad debts fell, giving banks the chance to reverse some provisions set aside for bad loans, he added.
Net profits in the sector reached $110 million in 2009.
Nine of the 19 banks are Palestinian, nine are Arab banks, and the last is Britain’s HSBC . Seven of the nine Palestinian banks are listed on the Palestinian bourse.
The seven local banks are Bank of Palestine , Arab Islamic Bank , Alrafah Microfinance Bank , Palestine Islamic Bank , Palestine Commercial Bank , Palestine Investment Bank and Al Quds Bank .
There are also Jordanian banks including Jordan’s Arab Bank Group, and Jordan’s Housing Bank for Trade and Finance .
The bulk of the profits were generated in the Israeli-occupied West Bank, where the Palestinian Authority has sway. Banks made little profit in the Gaza Strip, which has been run by Hamas Islamists since 2007.
Hamas opposes Palestinian President Mahmoud Abbas’s aim to negotiate peace with Israel.
The new credit bureau is part of the PMA’s plan to become a fully fledged central bank, Abu Shehadeh said. The Palestinians, who remain stateless, do not have their own currency. Most transactions are in Israeli shekels, Jordanian dinars or U.S. dollars.
PMA is modernising its legal infrastructure, regulations and policies, Abu Shehadeh said.
The Palestinian Authority has embarked on a plan to build the institutions of a state it wants to establish in the West Bank and Gaza Strip, with East Jerusalem as its capital, lands Israel occupied in 1967.
(Editing by Will Waterman)