The impact of the war on the Yemeni banking sector: Study

A new study stressed the need to establish a more stringent system in the field of combating money laundering and terrorist financing and to train all workers in Yemeni banks related to this field, in order to overcome the challenges that faced the banking sector during the years of war.

The study issued by the Media and Economic Research Forum showed that the banking sector in Yemen was the most key sector affected by the war, with the challenges that accompanied it, on top of which was the collapse of the value of the national currency, the liquidity crisis, the division of monetary policy, and the conflict of authorities between the two parties to the conflict.

The study sheds light on a number of axes, the most important of which is the liquidity crisis, its causes and repercussions, the areas of division of monetary policy and the conflict of authorities, the causes and risks of the collapse of the national currency, and how these axes affected the banking sector as a whole.

The study also singled out a special axis for analyzing the structure of deposits in banks, and how these challenges affected the volume of deposits, which reflected the nature of the varying response of bank managements to these challenges and the growth rate of deposits at the level of a specific sample of banks whose financial statements were available.

The effects of the war on Yemeni banks varied, based on the nature of the executive departments' dealings with emergency situations. While several banks were on the verge of bankruptcy, other banks were able to establish a successful banking experience, which was reflected in the banking performance indicators and the financial statements of those banks.

The study stressed that despite the great challenges that Yemen faced during the years of war, especially the challenges that faced the economic sector, the Yemeni banking sector remained coherent and continued to provide financial services, and to varying degrees depending on the way those banks were managed.