MY Research Project

1. ECONOMIC DIVERSIFICATION
OF GCC AND THE
CONTRIBUTION OF BANKS
TOWARDS THE
DIVERSIFICATION OF GCC
ECONOMIES
By,
Rose Maria Mathews

3. -100%
-80%
-60%
-40%
-20%
0%
20%
40%
60%
80%
100%
2012 2013 2014 2015 2016E
GDP Growth with oil Price per barrel
UAE QATAR OMAN BAHRAIN KUWAIT KSA per barrel

4. GCC HEAVILY DEPENDENT OIL ECONOMY
FALL OF OIL PRICES REDUCED THE GDP GROWTH OF GCC
Increased the fiscal deficit of Economy
Economic Diversification how?
Shifting towards non-oil Economy
Increasing the Private sector Growth
Higher GDP Growth in 2014
UAE, Qatar, Oman , Bahrain showing stable growth
Kuwait and KSA shown fall of GDP Growth

6. GDP GROWTH OF OIL AND NON-OIL
ECONOMY
57.3 54.8 51.9 50
25
42.8 45.2 48.1 50
75
0
20
40
60
80
100
120
2012 2013 2014 2015 2016 Est
GDP of oil and non-oil sectors of Qatar
hydrocarbon non-hydrocarbon

7. DIVERSIFICATION STRATEGIES
Sectors
Promising
Focussing
-10
0
10
20
30
40
50
2012 2013 2014 2015 2016E
9.8 12.3 11.1 7.4 6.7
10.5 9
19
18.1
9.9
11.1 5.6
4.1
3.2
7.9
1.2
0
-1.5 -0.2
0.6
4.6
5.9
8.2
8
8
GDP growth By sector
Services construction Manufacturing minning Agriculture

8. PROMISING SECTORS
• Manufacturing
• Construction
• Services are the promising sectors
• Steady revenue given to the economy
• Interdependency on these sectors
Manufacturing Construction
Services

9. FOCUSSING
SECTOR
HEALTH
GREEN TECHNOLOGY
FOOD AND
BEVERAGES
TOURISM
SME
EDUCATION

11. GDP SHARE OF OIL AND NON-OIL
ECONOMY
• Highest diversified Economy in GCC
• GDP Growth of non-oil Sector
increasing
• From the Economic outlook 2016, the
non-oil sector consists of 12 sectors
• Non-oil growth reaches to a growth of
4 % at 2017
0%
50%
100%
2012 2013 2014 2015 2016E
57% 55% 51%
35% 28%
43% 45% 49%
65% 72%
GDP Of oil and non-oil Share of
UAE
oil non-oil

12. Construction&
Real Estate
Promising
sector
Tourism
Transportation
Financial
Service

13. HealthEducation
Focussing
Sectors
Green
Energy
ICTManufacturing

15. GDP SHARE OF OIL AND NON-OIL
ECONOMY
2012 2013 2014 2015 2016E
92% 90% 88%
73%
65%
8% 10% 12%
27%
35%
GDP OF OIL AND NON-OIL SECTORS OF KSA
oil Revenue non-oil revenue

16. GDP CONTRIBUTION OF NON-OIL
SECTORS
• Mining and Quarrying is the highest
contributor
• Contribution of Agriculture become
less in 2016 compared to 2015
• Tourism shows a stable Growth
• Construction growth were fallen due to
less government spending in
Infrastructure 1.8 4.3 1.1 48 9.9 5.3
1.9 4.9 1.1
44.5
10 5.2
1.9 5.5 1.2
40.3
10.9 5.3
2.3 6.8 1.5
25.7
12.4 5
1.98 5.38 1.23 39.63 10.8 5.2
GDP CONTRIBUTION OF NON-OIL
SECTOR
2012 2013 2014 2015 2016E

17. Tourism
Manufacturing
Mining
Promising
Sectors

18. SMEEducation
Focussing
Sector
Health
Care
EnergyLogistics

20. 2012 2013 2014 2015 2016
87.9% 87.2% 88.3% 86.2% 81.3%
12.1% 12.8% 11.7% 13.8% 18.7%
GDP OF OIL AND NON OIL
CONTRIBUTION OF BAHRAIN
Oil non-oil
0%
20%
40%
60%
80%
100%
4.7% 4.1%
6.2% 11.2%
4.5%
12.7% 3.6% 4.0%
12.1%3.2%
2.7%
2.0%
9.5%
2.5%
6.5% 2.4% 2.3%
2.1%
3.8% 7.1%
4.0%
4.1%
5.9%
6.9% 2.8%
1.7%
2.2%4.1%
6.4%
1.7%
7.3%
5.9% 6.9%
2.8%
1.7%
2.2%
3.7%
1.8%
6.2%
2.5%
3.3%
9.6% 2.3%
4.8%
2.3%
Non-oil Sector GDP Contribution
2012 2013 2014 2015 2016

21. Promising
Sectors
Construction
Manufacturing
Financial
Service

22. EnergyLogistics
Focusing Tourism
Transport
ICT
Entrepreneur
ship

24. 2012 2013 2014 2015 2016
83.5% 80.1% 83.9%
74.9%
60.9%
16.5% 19.9% 16.1%
25.1%
39.1%
OIL AND NON-OIL CONTRIBUTION OF
GDP IN OMAN
oil non-oil
-60%
-40%
-20%
0%
20%
40%
60%
80%
100%
GDP Contribution of Non-oil Sectors
2012 2013 2014 2015 2016

25. Promising
Sectors
Agriculture
Manufacturin
g
Construction
Aqua Culture

26. Banking
And
Finance
Tourism
Focussing
Sector
Health
care
AviationEnergy

27. CONTRIBUTION OF
BANKS 5 BANKS
Analysis of loans and Advances from 2012-2016
Sector analysis of loans contribution by banks on 2016
Programs taken by the bank for diversification towards non-oil

28. GROWTH OF LOANS AND
ADVANCES (2012-2016)5 BANKS
$0.00
$10.00
$20.00
$30.00
$40.00
$50.00
$60.00
L&A(qatar)
NCB
ENBD(u.s)
NBAD
Al-Rajhi
Loans and advances of Bank
2012 2013 2014 2015 2016
0%
50%
100%
2012 2013 2014 2015 2016
YEAR ON YEAR GROWTH OF
LOANS AND ADVANCES
QNB L&A NCB (l&A) ENBD(l&A)
NBAD (l&A) Al-rajhi(l&A)

29. FINDINGS & REASONS
• National bank of Abu Dhabi highest loan contributor
• The stable growth of loans is higher in Al-Rajhi bank
• Except QNB: All Banks shows a decreasing trend in 2016
• NBAD bank loan growth falls to 2.6% at 2016
• Decrease of customer deposits
• Liquidity Tightening
Findings
Reasons

30. QATAR NATIONAL BANK

31. LOANS GIVEN BY THE BANK IN
NON-OIL SECTORS
-20%
0%
20%
40%
60%
80%
100%
2012 2013 2014 2016
Contribution of loans to the sectors
Govt Govt agencies Industry commercial
services contracting Real estate personal
Govt
22%
Govt
agencies
2%
Industry
29%commercial
3%
services
12%
contracting
14%
Real estate
4%
personal
14%
CONTRIBUTION OF LOANS TO
THE SECTORS AT 2016

32. • From the year 2012-2014: Loans active area
1. Personal loans
2. Construction
3. Real Estate
• Whereas services, Industry loan contribution were medium range
• 2016- the highest loan contribution is towards industry
• 2016 – GDP contribution is higher in Industry(8.2%)
• 2016-Banks given loans were also higher
Achievement :
It reveals that loans provided by the bank in 2016 towards industry sector generated the
GDP growth of industry sector to the country’s economy

33. NATIONAL COMMERCIAL BANK

34. LOANS GIVEN BY THE BANK
TOWARDS NON-OIL SECTORS
-200%
0%
200%
2012 2013 2014 2015 2016
loans given towards Non-oil Sectors
Services
Transportation and communication
Commerce
building and Construction
Electricity, Gas, health services
Banking contribution to non-oil
sectors in 2016
Govt and quasi govt
Banks & other financial institutions
Agriculture and Fishing
Mining and Quarrying
Manufacturing
Electricity, Gas, health services
building and Construction
Commerce

35. LOAN CONTRIBUTION AT 2016
Sectors Growth
Govt and quasi Govt -66%
Banks & other financial
institutions -5%
Agriculture and Fishing 19%
Mining and Quarrying 29%
Manufacturing 3%
Electricity, Gas, health services 28%
building and Construction -11%
Commerce -5%
Transportation and
communication -7%
Services -13%
• 2012-2014: active loan takers were
1. Service
2. Transport and communication
• 2015 and 2016 shows:
1. Decrease in contribution of loan
2. Highest loans were taken by mining
3. Government agencies were taken less
loans
Findings

36. NATIONAL BANK OF ABU DHABI

37. GROWTH OF LOANS GIVEN BY THE
BANK TOWARDS NON-OIL SECTORS
-50%
0%
50%
100%
2012 2013 2014 2015 2016
Loans given to the non-oil Sector
Agriculture Energy
Manufacturing Construction
Real Estate Trading
Transport Banks
Other Financial Instituitons Services
Government
Agriculture
-26%
Energy
2%
Manufacturi
ng
-13%
Constructio
n
1%
Real Estate
6%
Trading
-8%
Transport
10%
Banks
-19%
Other
Financial
Instituitons
9%
Services
0%
Government
-6%
SECTOR LOAN CONTRIBUTION
OF 2016

38. FINDINGS
• From 2015 -2016 the loan contribution of banks drastically decreased in most of the
sectors
• Except sectors like:
1. Transport
2. Energy( sustainable Financing)
3. Real Estate
4. Financial Institutions shown the positive loan contribution

39. EMIRATES NBD

40. GROWTH OF LOANS GIVEN BY THE
BANK TOWARDS NON-OIL SECTORS
Agriculture
0%
mining
1%
Manufacturi
ng
8%
Constructio
n
8%
Trade
15%
Transport
and
communicat
ion
4%
Services
4%
Real Estate
35%
Financial
Institiuions
25%
LOANS CONTRIBUTION AT 2016
BY ENBD
-80%
-60%
-40%
-20%
0%
20%
40%
60%
80%
2012 2013 2014 2015 2016
Loans contributed towards non-oil Sectors
Agriculture mining
Manufacturing Construction
Trade Transport and communication
Services Real Estate
Financial Institiuions

41. FINDINGS & REASONS
• At 2016 loans contribution drastically less and almost equivalent to 2012
• Highest loan contributors are Real Estate
• Followed by Financial Institutions
• Weak Revenues
• Bad debt among SME
Findings
Reasons
“Lower oil prices are likely to contribute to tighter Fiscal Policy and slower growth in non-oil
sector” According to Bank

42. AL-RAJHI BANK

43. GROWTH OF LOANS GIVEN BY THE
BANK TO THE NON-OIL SECTOR
-40%
-20%
0%
20%
40%
60%
80%
100%
2012 2013 2014 2015 2016
Contribution of loans to the sectors
commercial Industrial
Building and construction Services
Agriculture and Fishing
Personal
71%
commercial
12%
Industrial
5%
Building and
construction
4%
Services
7%
Agriculture and
Fishing
1%
Loans provided by the bank on
2016
Personal commercial
Industrial Building and construction
Services Agriculture and Fishing

44. FINDINGS
• Loan contribution Were higher in 2016 ,therefore the diversification is happening
• The contribution of loan growth is more:
1. Construction
2. Industry
3. Services
• Higher loans are Given Towards personal loans
• Following Services and commercial

45. NATIONAL BANK OF KUWAIT

46. LOANS AND ADVANCES AND
CUSTOMER DEPOSITS
2011 2012 2013 2014 2015 2016
$2.52 $3.03 $3.25
$3.59 $4.02 $4.10
$0.49 $0.63 $0.59
$1.05 $0.90 $0.91
L&A AND CD
L&A CD
-20%
0%
20%
40%
60%
80%
100%
2012 2013 2014 2015 2016
YEAR ON YEAR GROWTH
L&A CD

47. LOANS GIVEN BY THE BANK TO
NON-OIL SECTOR
-20.0%
-10.0%
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
2012 2013 2014 2015 2016
Loans given by the bank towards non-oil
Trading Manufacturing construction
Real Estate Retail Government
Trading
15%
Manufacturing
11%
construction
9%
Real Estate
19%
Retail
30%
Government
16%
Loans given by the bank on 2016
Trading Manufacturing construction
Real Estate Retail Government

48. FINDINGS
• IN 2016 Government agencies are the active loan takers – year on Year loan growth
• Loans contributed were higher in 2016:
1. Retail Sector
2. Real Estate
3. Manufacturing
• Diversification is happening less because of less role of private sectors and higher
loans takers were government agencies

49. DIVERSIFICATION PROGRAMS TAKEN BY
BANKS

50. PROGRAMS TAKEN BY THE QNB FOR
DIVERSIFICATION
AL-Dhammen
JAHIZ-1
JAHIZ-2

51. WORKING OF AL-DHAMMEN
• Supporting program by Qatar
development bank in partner with
Qatar national bank
• Promoting Small medium
Enterprises
• It is an indirect Facility Loan
• Reducing the dependency of
imports and promoting Domestic
products
Al-Dhameen Indirect facility loan
loan
providing
partner bank
main bank
is QDB
Partner banks providing
fund are QNB and other
subsidiary banks like al-
khaliji bank, CBQ
start-
up(<3yrs)
and existing
companies
funding is
up to for 2
companies
non -national can also
apply through FCI( foreign
capital investment)
interest
rate is 7%

52. JAHIZ-1 & JAHIZ-2 INITIATIVE
INCREASE PRIVATE SECTOR GROWTH
Investment of $ 4.11 million and plots provided on monthly lease of 5 years
INDUSTRIAL SECTORS(SME)
Provides opportunity to rent INDUSTRIAL FACILITIES
technological innovative industries operating in the field
of chemiclas,plastic woods and electronic materials
QDB-QNB-QIB( under MOU)
AL-DHAMEEN( through indirect facility loan) JAHIZ-1
• Taken by QDB-QNB
Jahiz-2
• 14 plots to SME and Entrepreneurs(lease basis)
Food and Beverages sector
• Assistance given which includes consultations, business plans
and feasibility studies by QDB for setting business
Top Priority: Innovative and Eco friendly
products

53. GENERATION GREEN PROGRAM
• Initiated By Al-khaliji Bank
• Supporting Qatar Green Technology
Business
• Contribution by the bank : $41.3m
• Plant is used to recycle used tyres and
Rubber Materials
Main initiative: Qatar
Modern Recycling Factory

54. PROGRAMS TAKEN BY THE NCB FOR
DIVERSIFICATION
Kefalas SME
Support
Program
Tajer Al-Ahli
Program

55. • 53% of total number of kafalah issued
Contribution
Financing is given to every sectors
Achievement growth-19.8%
Kafalah SME Program
Financing
Working Capital
Commercial Real Estate
Auto-lease
Tajer Al-Ahli Program

56. ACHIEVEMENTS
• At 2015 Credits given to SME increased to 8%
• Leading Sectors were:
1. Construction -59%
2. Commercial Sector-18%
3. Finance and Business- 8%
4. Industrial sector-7%
5. Auto-lease- 33%

57. PROGRAMS OFFERED BY THE NBAD
FOR DIVERSIFICATION
Programs
Sustainable Finance
SME Training Program

58. SME TRAINING PROGRAMN
• SME constitute 94% of company operating in UAE
• GDP contribution is 60%
• Access to finance
• Develop Business Skills
• Manufacturing, Media, Consultancy
• Education, Finance, Construction
• Can add $100 billion to GDP
• Generate 2 million Jobs
Description
Objective
Targeted Sectors
Predicted Growth

59. SUSTAINABLE FINANCE
• Financing the sectors which provides Product and Services
• Supporting the growth of low carbon economy
• Joined with UNEP Finance initiative on 2016
• Provides lending of $10billion of financing for sustainable Energy projects
Description
Initiative
Focussing on
Clean
Transportation
Sustainable Water
Waste
management
Energy
Efficient real
Estate

60. ENERGY TARGET BY GCC
UAE Qatar KSA Bahrain Kuwait Oman
24% clean
energy by 2030
Add 10GW of
solar capacity
by 2030*
Emission
savings of
130Million
Tonnes CO2
equivalent
No specific
targets: pledge
to diversify
economy
No specific
targets: pledge
to diversify
economy
2% emissions
reduction by
2030

61. NON-OIL SECTORS OF
QATAR

62. MANUFACTURING(Q)
Manufacturing:
1. Petrochemicals
2. Fertilizers
3. Steel
0 2 4 6 8 10 12
Services
construction
Manufacturing
9.8
10.5
11.1
6.7
9.9
7.9
GDP contribution of Promising
sectors
2016E 2012

63. CONSTRUCTION
• Construction accounts 18.1% to the GDP
• Major source for Infrastructure
• Infrastructure is needed for development of:
1. Power and Water
2. Transport
3. Tourism
4. Buildings
Power and Water
Eg: Treated sewage
Effluent
Transport
Eg: Doha international
airport
Tourism
Eg: Doha Festival city
Buildings
Eg:stadium, Hospital
,Hotels
Infrastructure

64. SERVICE SECTOR
Service
Trade
Restraunt
Hotels
Transport
Communicatio
n
Finance
Insurance Real
Estate
-2 0 2 4 6 8 10 12 14 16
Trade,Restraunts and hotels
Transpot and communication
Finance,Insurance,Real estate
6.3
6.1
11.3
13.2
-0.5
13.7
14.3
11.9
12.3
8
4.2
8.7
Service Sub-sector Growth
2015 2014 2013 2012

65. GREEN TECHNOLOGY
Generating energy into non-toxic
products
 Green Expo 2017-16th November
Solar farm generating
1. Photovoltaic Industry
 Sahara forest Project
‘Generation Green program’-al khaliji
bank
Environmental development- 4 main
pillars of Qatar national vision
Description
Government initiatives to promote the
sector
Objectives of promoting the sector

66. FOOD AND BEVERAGES
• High Income consumer Base
• Increasing Population Growth
• High Influx of foreign nationals
• CAGR rate of 14.4% over the next 5
years
• Increase in the malls and promoting
Tourism Sector

67. TOURISM
This sector accounts 5.2% of Qatar GDP
on 2030.
Promotion Of tourism includes:
• Doha Festival city-Largest mall of
Qatar
• Qatar labelled as Destination brand
• Promotion of Marine Tourism

68. SMALL MEDIUM ENTERPRISES(SME)
• Sweet spot of Qatar Economy
• Generation of Sports service Sector
• Creating investment opportunities
1. Event Management
2. Marketing
3. Sports Development
4. Venue Management
• Focussing of Industrial Sector
• Mainly finished and refined products
SME
SPORTS INDUSTRY

69. EDUCATION
• Educational sector –main driver for
consumer inflation
• More emphasis education from its
national vision 2030
• Focussing more towards preliminary
secondary school
• Over 57% 0f K-12 students enrolled in
private schools.
• Education budget for 2017 is $5.7billion
• Doha Educational City

70. HEALTHCARE
• Qatar spends 2.2% of GDP –world bank
• Increase in population growth
• Highest per capita spending in Health
care
• Hamad bin Khalifa Medical city-New
project expanding medical sector
• Sidra medical and research centre

71. NON-OIL SECTORS OF UAE

72. CONSTRUCTION AND REAL
ESTATE(UAE)
• Dubai Expo 2020
• Growth 6.6 % in 2017
• $8.3 billion in construction project in Dubai
• Man-Mad islands of $ 1.3billion
• Route 2020 Metro Link
• Abu Dhabi Airport Expansion
Demand
Investment
Projects
Construction
Infrastructure
Tourism

73. TOURISM
• Dubai and Abu-Dhabi is the international spotlight
• Sector Growth is 5.4% annually over the next 10
years
• Dubai – top rank on international visitor spending $
31.3 billion
• Expected growth of Hospitality market at CAGR of
0.76% annual rate
• Building of tourist resorts in man-made island
• Dubai 2020 Tourism Vision
2020
tourism
Vision
Safari
Project
Aladdin City
Project
Dubai Creek
Tourism
Dubai
Frame
project
Attractions
Projects

74. TRANSPORTATION
• Geographical Position
• Hydrocarbon generation
• World-class infrastructure
• Stable GDP growth
Transport
Logistics
Aviation
Shipping
Description

75. FINANCIAL SERVICE SECTOR
• World’s largest market-Sukuk Bonds
• Fintech investment fast growing
• 2022 would reach-$1bn
• Launch of FIN Tech hive at DIFC
• Strategy: Attracting leading technology
and Entrepreneurs
Description
Initiatives

76. EDUCATION
• 24%- Government Expenditure
• $7.3billion-estimated market size
• Demand: Private schools
• UAE Education 2020
• 50 new private schools in 2020-
Forecast
• Funding focussed on STEM
Focus
Single
gender
Education
Music
Education
Bloxels
and video
games
Robotics
programmi
ng, IOT
and
Science
Description
Initiatives

77. HEALTH
• Market forecast of CAGR 7% between
2015-2020
• Reason- Adoption of universal Health
Insurance
• Medical tourism-out of total medical
tourists 47% were foreigners
• Expected Growth in Medical tourism-
13% each year by 2021
• UAE vision 2021
Description
Initiatives
• Investment of $ 820 million
2013- 12 year plan
• Dubai clinical service capacity plan
2015- 10 year plan
• Expected emirates growth- $ 9.79 million to $15.7
million at 2021
2015- Building Sharjah health care city

78. GREEN ENERGY
• Vision –world leading advocate of
Clean Energy Technology
• Investment of $2.7billion in clean
Energy
• Dubai vision- lowest carbon foot print
city in the world
• 7% of its power from clean energy
• UAE Energy Plan 2050
• NBAD adoption towards sustainable
finance
Green
Projects
Shams-1
Solar
Impulse 2
Masdar
city
Solar Park
Description
Initiatives

79. WATER
• Scarcity of ground water reserves
• 550 litres per day-Highest water
consumption
• PPI with Water Technology Companies
• Water Transmission Network-Dubai
Water sub-
sector
Ground
water
Waste
Water
Drinking
Water
Description
Initiatives

80. MANUFACTURING
• Expected contribution to GDP-25% by
2025
• Abu Dhabi-Heavy Industries
• Dubai & Sharjah-Light industries
• Dubai Industrial Strategy 2030
• Aim to enhance the depth of
knowledge and innovation
Plastics and
Rubber
Food and
beverages
Precious
stones and
Metals
Minerals
and
Products
Electrical
machinery
and
Equipment
Chemicals
and
Products
Description
Focus
Initiatives

81. GDP CONTRIBUTION OF NON-OIL
SECTORS OF SAUDI ARABIA
• Mining and Quarrying is the highest
contributor
• Contribution of Agriculture become
less in 2016 compared to 2015
• Tourism shows a stable Growth
• Construction growth were fallen due to
less government spending in
Infrastructure 1.8 4.3 1.1 48 9.9 5.3
1.9 4.9 1.1
44.5
10 5.2
1.9 5.5 1.2
40.3
10.9 5.3
2.3 6.8 1.5
25.7
12.4 5
1.98 5.38 1.23 39.63 10.8 5.2
GDP CONTRIBUTION OF NON-OIL
SECTOR
2012 2013 2014 2015 2016E

82. TOURISM(KSA)
• Second highest contributor to KSA GDP
• Capital investment grown by 5.5%
compared to other GCC
• Takamul Program
• Saudi Travel and Tourism investment
Market
Initiatives
Business
Tourism
Religious
Tourism
Health Tourism
Focus
Culture Tourism
Eco Tourism

83. MINING
• Highest non-oil GDP Contributor
• Abundance of Natural Resources and Raw
materials
• Expected contribution:
1. 2020- $26billion
2. 2030-$46billion
• Aluminium Production-joint venture
(Maden and Alcoa corp)
• Mineral processing technology requires
• Needed consulting Engineering companies
• infrastructure demand increases
• Increase the opportunity for power,
Transport, communication and construction
challenges
opportunities

84. MANUFACTURING
• Public Private Partnership:
1. Aramco with DOW chemicals-
$20billion
• Companies converting plastics into
Packaging
• Aluminium into car parts
• Attracting big car makers to
manufacture aluminium bodies
• Six New Economic cities
1. King Abdullah Economic City(EMAAR)
Stronger Growth
Petro-
chemicals
Plastics
Attracting areas
Initiatives