Financial Outlook of the OIC Member Countries 2017
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Figure 24: Bank Capital to Total Asset (%)
Source: Authors’ calculation from the World Bank Database
The bank nonperforming loans to gross loans (NPL) Ratio is calculated as defaulting loans
(payments of interest and principal past due by 90 days or more) to total gross loans (total
value of loan portfolio). The loan amount recorded as nonperforming includes the gross value
of the loan as recorded on the balance sheet, not just the amount that is overdue. As this ratio
increases, possibility of insolvency in the banking sector also increases.
Figure 25: Bank Non-performing Loans to Gross Loans (%)
Source: Authors’ calculation from the World Bank Database
The Figure shows that NPL ratios of OIC-LIG, OIC LMIG and OIC UMIC were very high
compared to OIC HIGH. OIC LIG score for example increased significantly over the years and
reached to 9.4 percent in 2015. While the OIC-LMIG scores were fluctuated around 10 percent,
the OIC-UMIG group performance improved since 2012 and dropped to 8 percent in 2015.
OIC-HIG has shown a very good performance over the years and the ratio declined to 2.5
percent in 2015 which was much better than the world average as well.
Financial stability is very crucial characteristic to measure the robustness of the financial
institutions and markets. This characteristic has an overarching impact on all other financial
measures and indicators as well as reflecting the health of all economy as its impact
systemically affect overall economic structure. The selected indicators reveal that the OIC
averages are hovering around the world average. On the other hand, high and upper middle
income country groups have performed better than the world average.
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OIC-LIG OIC-LMIG OIC-UMIG OIC-HIG OIC-Average World Average
2012 2013 2014 2015
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OIC-LIG OIC-LMIG OIC-UMIG OIC-HIG OIC-Average World Average
2012 2013 2014 2015