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GCC banks: Domestic deposits remain robust despite disruptive events

GCC banks: Domestic deposits remain robust despite disruptive events

Banks in the Gulf Cooperation Council (GCC) states have remained stable despite political disruptions, which tend to trigger risk aversion among investors, prompting higher funding costs or even capital outflows from the system, according to a new report by S&P Global.  

For GCC banks, “the largest funding item–private domestic deposits–has increased year-on-year over the past three decades despite a series of disruptive regional events, including Yemeni civil wars, the Arab Spring uprisings, the Iraq War, Qatar boycott, and several Houthi missile attacks,” said analysts Benjamin Young and Mohamed Damak in the report.

The report pointed to four contributing factors that explain how GCC banking systems preserved deposit stability and maintained trend growth despite numerous geopolitical shocks.

Expatriates dominate the population, but not bank accounts: Although foreign residents comprise about 90 percent of the populations in Qatar and Dubai, they represent a far smaller percentage of retail deposits. In contrast, non-national retail deposits in Kuwait and Saudi Arabia represent less than 20 percent of the total because incentives for retaining out-of-contract migrant labor are less common, the ratings agency said.

Oil revenue has supported public spending, corporate development and population growth: Economic development policies backed by oil revenues have pulled vast amounts of expatriate labour to the region and incentivized corporate expansion, which has supported deposit growth.

Depositors from higher-risk countries add to stability: The stability of most GCC banking systems has led them to be seen as safe havens for savings,

investments, and business development from less stable countries in the wider Middle East and sub-continental Asia. While lower-paid migrants tend to be structural remitters, higher-paid workers are encouraged to retain wealth by the host. “The growth of the latter could increase deposit instability but can also be an important funding item if linked to longer-term incentives,” S&P said. 

Wealthy public sectors also support bank deposit stability: In the GCC, income from the sale of oil and gas underpins public sector deposit growth, which is generally routed through national oil and gas companies. Oil revenue has facilitated the development of some of the world’s largest sovereign wealth funds which have continued to earn returns during periods of low prices, the report said.

(Writing by Brinda Darasha; editing by  Daniel Luiz)

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Belleville calendar bursting with wealth of events slated this summer

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Spring Family Funfest opening this Saturday at West Zwick’s Park kicks off a summer season in Belleville of live events and community entertainment, members of the Economic and Destination Development Committee Thursday.

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From a return of past successful events like Pop-Ups on the bay and Downtown at Dusk to the inaugural Caribbean Festival, residents have a lot to look forward to this summer — considering city parks are booked solid with events from June to August.

The free-admission Family Funfest takes place on Saturday at West Zwick’s Park and offers a range of art focused family activities like face painting, crafts, family art projects, button making and even a petting zoo.

There will also be interactive exhibits on display from Glanmore House and Quinte Conservation as well as food and an artisan market. 

The event is run in partnership with the Mayor’s Week of the Arts which highlights a plethora of seasoned and talented artists in the city.

“Whether it’s painting… (or) doing face art, it’s always a lot of fun,” Jill Raycroft, CEO of the Belleville Chamber of Commerce, told committee members in an update.

Belleville’s anticipated Caribbean Festival is slated to take place June 25 and aims to be a celebration of culture, music, dance and food. Taking notes from Toronto’s famed Caribbean Carnival, a main stage set up on Front St. will serve as the centerpiece during a feast for the senses.

“On the main stage we’ll have steel pan drums, Caribbean costume dancers, and a DJ set up for the day. We’ll also have a number of local musicians and dance groups as well,” said Elisha Purchase, Development and Tourism Coordinator at the City of Belleville. A lot of that entertainment when they’re not on this main stage will be strolling entertainment on the street.”

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The Caribbean festival is just the latest in a recent push by the city to host more diverse and culturally educational events.

Similar to Diwali celebrations hosted by Belleville in October by Indian students and community members, the Caribbean festival is being planned by individuals from Caribbean nations.

“They know their culture. So it’s been incredibly important to have them spearhead this,” said Purchase. “A goal through our strategic plan is to look at diversity and bring that infusion of culture into the downtown.”

Belleville’s summer is also looking up with the return of two city mainstays at West Zwick’s Park, Canada Day on July 1 and the Belleville Waterfront and Multicultural Festival running from July 7-10.

“It definitely feels like we’re in pre-COVID times — obviously COVID is something that we have to live with, I think, forever,” said Purchase. “I think there’s a lot of enthusiasm from people who are organizing events who are attending events and enthusiasm from the business community, especially the tourism industry.”