Despite protests and downgrades Bahrain to remain key financial hub
Bahrain will remain the hub for financial services in the region, despite competition from Dubai and Qatar, top bankers said yesterday.
They were speaking during Bahrain Association of Banks' (BAB) third quarterly 'Meet the Press' roundtable at the Gulf Hotel, and were unanimous in the opinion that what Bahrain offered as a location to the financial services sector was unmatched and would remain so.
The panel included BAB chairman Abdul Karim Bucheery, Al Baraka Islamic Bank chief executive Mohamed Al Mutaweh, Economic Development Board (EDB) financial services director Boyd Winton, chief economist Jarmo Kotilaine, Bahrain Financial Exchange managing director and chief executive Arshad Khan, reported the Gulf Daily News, our sister publication.
Bucheery said he hoped that the country would regain the A- rating soon. International rating agency Standard & Poor's has recently revised its outlook on the kingdom from 'negative' to 'stable'.
"In the current year we should start to see the beginning of the growth cycle. Bank lending to the private sector is expected to expand," he stated.
"Overall, banks have shown strong profit as compared to last year. Results released to date look positive from both retail and wholesale banks in the conventional and Islamic sectors and this confirms the positive trend," he said.
Highlighting Bahrain's edge in the banking space, Winton said: "If you have a long-term five to 10 year strategy to integrate into the wider regional market, then Bahrain has the unique mix of attributes that you look for - in terms of regulatory environment, legal framework, and qualified local workforce.
"Studies have shown that in terms of cost-effectiveness, Bahrain is 55 per cent cheaper," Winton said.
"We are expecting more complementary businesses to come in this year and we are quite confident about the year ahead, both for new entrants and continued growth," he said.
Kotilaine said growth is also likely to pick up further in 2013 due to planned large-scale industrial investments and growth in infrastructure spending.
"The Bahraini economy is fairly resilient to external shocks and it is currently estimated that real GDP growth could exceed 6 per cent this year."
Al Mutaweh said overall we saw a marked pick-up in asset growth and profits in 2012 than in the previous year.
"Islamic banks will look to identify new strategies for growth and prosperity while addressing new opportunities," he said.
Bucheery said the outlook appears bright. "There is the promise of improved profits and a stabler macroeconomic environment further boosted by higher oil prices."
"The country's retail banks are generally in robust health and have been working to remobilise their liquidity," he added.
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