Data released yesterday by the Central Bank revealed that the banks significantly reduced the granting of bank loans in January 2020, at a time when it raised its investments in stocks, bonds and securities held until the due date.
The figures showed the decline in total bank credit at the end of January 2020 to one trillion and 737 billion dirhams, compared to one trillion and 759 billion dirhams at the end of last December, a decrease of 22 billion dirhams, while investments in the same month increased by 13.2 billion dirhams, bringing the total balance at the end of January 2020 To 412.2 billion dirhams, compared to 399 billion dirhams at the end of 2019.
Deposits outnumber
According to the data, bank deposits continued to outperform loans to reach a difference of 89.3 billion dirhams, as deposits at the end of January 2020 recorded one trillion, 826 billion and 300 million dirhams, compared to loans of one trillion and 737 billion dirhams.
Provisions for debt that banks avoided to cover non-performing or non-performing debt and pending interest increased during last January, reaching its balance to 100.3 billion dirhams, compared to 98.8 billion dirhams at the end of December, with a monthly increase of 1.5 billion dirhams.
Returns without risk
The banker, Muhannad Awni, said that the banks recently focused on investing in all kinds of securities, whether they were bonds, guaranteed stocks or sukuk, given that there is a return without significant risks.
He added that with the beginning of the year, there is usually a wait for granting loans and financing, as each bank’s departments set their policies for the new year or adjust some of them.
Awni pointed out that the demand for loans itself is slow in the first quarter of the year, compared to the rest of the quarters due to the momentum of offers, reductions in financing prices at the time, clarity of market trends and business movement, and the form of demand for funds by individuals.
normal thing
In the same context, the banking expert, Sheikha Al-Ali, said that the comparison of the January-December 2019 numbers shows a big difference in most banking indicators, considering this as a natural matter, as banks deliberately close their budgets at the end of the year with positive numbers, so we find many offers and discounts that raise the demand for Funding.
She added that the beginning of the year is a study of the market and credit trends, and then decides the levels of interest and fees that can be reduced and other things.
• Bank deposits continue to outperform loans, bringing the difference to 89.3 billion dirhams.