Financial Services

International ratings agencies and analysts have given Qatar’s banking sector a clean bill of health, though the central bank is keeping an eye on non-performing loans (NPLs), as well as monitoring inflationary pressure.

More robust enforcement of mandatory insurance laws is set to increase Nigeria’s insurance penetration rate, which currently stands at less than 10%. In August, the National Insurance Commission (NAICOM), the regulatory agency for the sector, announced that starting this month it would implement compulsory insurance laws that have been on the books – but largely unenforced – for many years.

Malaysia’s automotive insurance sector has seen several important improvements in the past few months, with the industry’s regulator issuing a series of directives designed to strengthen policyholder protection, rationalise costs and speed claims processing. The industry has generally welcomed these changes, though some experts have suggested that full compliance could be hard to achieve.

Since issuing a decree to establish an Islamic financial services sector in May, Oman has seen a flurry of activity as banks have started gearing up to move into the new market. As well as the establishment of new Islamic banks, the sector is also seeing an upsurge of sharia-compliant services at convention institutions as well as movements in other financial services to offer Islamic products.

The Kingdom’s banks are moving toward the second half of 2011 in a strong position, but their ongoing conservative positions have triggered criticism. Saudi Arabia’s financial institutions are cashed up with healthy levels of liquidity, operating in a secure and growing economy, and have shown new earnings and investment potential. Despite this, there have been calls for the Kingdom’s lenders to be more active in advancing credit, after two years of building up reserves.

The Omani government has opened its doors to Islamic banking, with Sultan Qaboos bin Said Al Said issuing a royal directive in early May allowing for the roll-out of sharia-compliant financial services and institutions.