Banking
From The Report: Bahrain 2015
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Despite being buffeted by successive financial storms since 2008, Bahrain’s banking sector has remained resilient and in February 2014 the Central Bank of Bahrain’s (CBB) “Financial Stability Report” showed many areas of strength and renewed vigour. In 2014 the finance and banking sector accounted for nearly 17% of GDP, according to the CBB, making it the second-largest contributor after the hydrocarbons sector. Deposits reached BD15.23bn ($40.4bn) in February 2013, their highest levels since 2008, while the central bank expected credit growth to the private sector to increase in 2014 after reaching a peak of $18.56bn at the end of September 2013. Meanwhile, the CBB has been urging greater consolidation across the sector to strengthen against future financial shocks, with both conventional and Islamic banks on the lookout for merger opportunities.

This chapter contains a viewpoint from Khalid Hamad, Executive Director – Banking Supervision, CBB, and Chairman, International Islamic Financial Market; and CEO, National Bank of Bahrain; and Hassan Jarrar, CEO, Standard Chartered Bahrain.

Articles from this Chapter

Overview

Bahrain remains a leading regional centre for banking and finance
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Buffeted by successive financial storms in the years since the collapse of Lehman Brothers, Bahrain’s financial sector is poised to take advantage of renewed optimism and confidence in key parts of the global economy. The overall shape and composition of the country’s banking sector has changed since 2008, but it has proved resilient overall and the annual reports of many leading retail lenders told a story of renewed growth over the course of 2013. A detailed “Financial Stability Report”…

Analysis

Mergers and acquisitions reshape Bahrain’s banking sector
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For a country with a population of 1.2m, Bahrain has a complex banking landscape with 104 institutions holding licences as of March 2014. There are 80 conventional banks, including 22 conventional retail banks, and 24 Islamic banks, of which six are retail banks. The Central Bank of Bahrain (CBB) has been urging greater consolidation across all segments to create more robust entities that are better able to weather any financial shocks. Consolidation took place during 2013-14 and further activity…

Viewpoint

Khalid Hamad, Executive Director – Banking Supervision, CBB; Chairman, International Islamic Financial Market, on the regulatory framework
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The 2008-09 financial crisis threatened the stability of the global banking system, and central banks across the world were forced to take unprecedented measures to stabilise the situation and to provide a safe operating environment for the financial industry. Financial regulators still have to deal with many issues to ensure that the new regulations provide a foundation for financial stability and sound operational practices, while ensuring fairness and transparency. This focus for regulators does…

Analysis

Experts discuss Bahrain’s banking sector
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Despite being synonymous with financial expertise for more than 40 years, Bahrain is not resting on its laurels, and it faces stiff competition from growing regional centres like Abu Dhabi, Dubai, Doha and Riyadh. Bahrain climbed 12 places in the 15th Global Financial Centres Index (GFCI) published by Z/Yen Group in March 2014. But its recent ascent, based on a six-month period, only earned Bahrain 40th place in a ranking of 83 financial centres around the world. Ahead are Qatar at 26th, Dubai (29th),…

Interview

Hassan Jarrar, CEO, Standard Chartered Bahrain: Interview
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Interview:Hassan Jarrar How do you respond to calls for more consolidation in Bahrain’s banking sector? HASSAN JARRAR: Banks consolidate to expand and acquire a stronger ability to compete on a domestic and/or a regional level, among other reasons. When we look at Bahrain, strong performing banks need to highlight their strengths and build capacity in different niches before they revert to consolidation. Innovation is key for the kingdom’s banking sector, and we constantly need to re-invent…