Downturn in Bahrain's offshore banking sector
Bahrain's offshore banks recorded a 15.4 percent downturn in profits last year, the Middle East Economic Survey reported Monday, September 3, questioning the future of the whole sector.
Bahrain's offshore banking "continues to display significant disparities in terms of activity, size and performance, calling into question the franchise of individual institutions and, to some extent, the future of the offshore sector as a whole in light of global moves toward fiscal harmonization," the authoritative Nicosia-based newsletter said.
Eight banks included in a MEES survey recorded a sectoral decline in net profits of 15.4 percent, although individual performances ranged widely from Gulf International Bank's 75 percent rise in net income to a decline of 99 percent at Bahrain International Bank and an outright loss of $56.8 million at BMB Investment Bank.
Assets for the sector rose by only 4.3 percent in 2000, and latest information from the Bahrain Monetary Agency indicates that assets for the entire offshore banking sector fell at the end of June to $83.04 billion compared to $90.33 billion for the equivalent figure in 2000.
On the positive side, MEES noted that sectoral giants GIB and Arab Banking Corporation, which together hold almost half of the sector's total assets, had shown a certain dexterity in restructuring and regaining profitability.
Analysts generally commend the recent "sale" by Gulf Investment Corporation of GIB to its own GCC shareholders even if the details of the transaction remain somewhat opaque, the newsletter said.
The GCC (Gulf Cooperation Council) groups Bahrain alongside Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates. — (AFP, Nicosia)
© Agence France Presse 2001
© 2001 Mena Report (www.menareport.com)