72.9% of Funds Managed for Bank Clients in the Local Market
The total value of funds managed by local banks on behalf of third parties in shares, bonds, sukuk, and investment units amounted to approximately KD 1.152 billion.
Local equity funds managed on behalf of third parties accounted for 39.54% of the total, valued at KD 455.6 million, while foreign equities represented only KD 60 million.
The value of bonds and sukuk stood at KD 163.4 million, comprising KD 100.5 million in local bonds and KD 62.9 million in foreign instruments.
Other diversified local opportunities were valued at approximately KD 168.3 million, with zero value attributed to other foreign opportunities.
The total funds actually deployed and distributed across opportunities in the local market reached KD 1.140 billion. Of this amount, KD 831.5 million was invested in local market opportunities, representing 72.9%, while KD 309.4 million was allocated to foreign markets and opportunities, accounting for approximately 27.1%.
Cash balances held within portfolios managed by banks on behalf of third parties amounted to approximately KD 11.4 million.
Various segments of investors directly entrust banks with managing portions of their surplus funds, relying on the prudence and strategic approach of the conservative banking sector, as well as its ability to interpret indicators and data and to identify opportunities.
The rising share of local equities in the volume of funds managed by banks for clients reflects confidence in the local financial market despite repercussions and challenges. This confidence can be further substantiated from two additional perspectives: the expansion in accepting equity guarantees, and the continued support and financing of companies with the necessary liquidity to sustain their activities and operations.
In a related development, banking figures revealed competitive performance between the conventional and Islamic sectors regarding financial soundness indicators. Shareholders’ equity to total assets stood at 13.1% in the conventional sector, compared to 11.6% in the Islamic sector.
Net profit margins were 38.4% for conventional banks and 38.6% for Islamic banks. Non-performing loans in the conventional sector amounted to 1.2%, with a coverage ratio of 157.6%. In the Islamic sector, non-performing financing stood at 1%, with a coverage ratio of 259.3%.
Return on average shareholders’ equity was 10.1% in the conventional sector, compared to 11.1% in the Islamic banking sector. Operating expenses accounted for 74% of income in the conventional sector, with a basic-to-operating income ratio of 86%. In the Islamic sector, operating expenses represented 70.7% of income, and the basic-to-operating income ratio was 80.1%.
