BMI View: Jordan has a robust and mature banking and financial sector. Despite facing considerableinstability and volatility in the region, it has remained resilient. Total assets grew by 2.6% in 2016 equatingto 172.6% of GDP, making it one of the largest economic sectors in the country. We expect this trend tocontinue over the next five years with total assets growing by an average of 3.5% per annum. That said, webelieve the government's austerity measures will limit opportunities in the public sector for the foreseeablefuture leaving banks highly reliant on the private sector for borrowing and saving opportunities.
Despite demonstrating significant resilience in what has been a challenging economic and securityenvironment, Jordan's banking and insurance sector faces a number of challenges. The country's populationis relatively poor with a GDP per capita of just USD3,258.5 in 2016. Many of the country's most wealthycitizens live abroad, predominantly in neighbouring GCC states, thus limiting demand for key products. Thegovernment's strict austerity measures reduce public sector opportunities and have forced many financialinstitutions to shift the focus of their expansion strategies to the private sector. On the whole, the market ishighly concentrated with a small number of financial institutions dominating market share. This has reducedcompetition in the market and led to negative knock on consequences for customers including higher pricesand limited innovation. Although government drives to increase regulation and enhance competition areunderway, we believe the market will remain unchanged for the foreseeable future.
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