Islamic Financial Services
From The Report: Bahrain 2015
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Bahrain remains a world leader in Islamic finance, boasting the highest concentration of Islamic financial institutions globally, with six licensed Islamic retail banks and 18 licensed Islamic wholesale banks. Islamic wholesale banks’ investment portfolios have begun to demonstrate promising diversification in recent times, with a shift away from risky real estate fuelling interest in other sectors. Meanwhile, in 2014 the Central Bank of Bahrain, which regulates the kingdom’s Islamic financial institutions, introduced regulatory changes aimed at ensuring best practice is applied to sharia-compliant transactions, including the issuance of sharia-compliant bonds and the Islamic insurance segment. Today takaful represents one of the fastest-growing segments of Bahrain’s insurance sector, with gross contributions of takaful companies growing 7% from $142.31m in 2012 to $151.58m in 2013, according to the central bank.

This chapter contains a dialogue between Adnan Ahmed Yousif, President and CEO, Al Baraka Banking Group; and Aabed Al-Zeera, CEO, International Investment Banking.

Articles from this Chapter

Overview

Consolidation and diversification of investment portfolios in Bahrain’s Islamic finance sector
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With one of the world’s longest traditions in Islamic banking and a diverse offering of retail and wholesale shariacompliant lenders, Bahrain is seen as a leading centre of one of the fastest-growing global financial phenomena. A number of international institutions providing guidance, ratings, standards and education in Islamic finance have their international headquarters in the kingdom. Among the Islamic banks based in Bahrain, there are institutions with hundreds of branches in Muslim and non-Muslim…

Overview

OBG talks to Adnan Ahmed Yousif, President and CEO, Al Baraka Banking Group, and Aabed Al-Zeera, CEO, International Investment Bank
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Interview: Adnan Ahmed Yousif,Aabed Al-Zeera What new asset classes are emerging that could provide sustainable profits for the future? ADNAN AHMED YOUSIF: The Islamic finance industry today manages almost $1.8trn, and over 60%, or $1.1trn, of this is managed by the major segment of the industry, Islamic banks. These are by nature classified as retail banks that manage a highly diversified portfolio. Real estate could be one of the segments for some banks, and if we exclude real estate as…

Analysis

Regulatory changes in Bahrain’s Islamic finance sector
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Widely regarded as a leading centre of innovation in Islamic financial services (IFS) and known for its robust and responsive regulation, Bahrain is growing in influence. The kingdom’s Islamic financial institutions are regulated by the Central Bank of Bahrain (CBB), and in 2014 the CBB has made a number of refinements to its codes and rules for licensed entities. Some of these regulatory changes are driven by Basel Committee rulings, which apply to both conventional and Islamic lenders, while…

Analysis

Growth in pension funds bodes well for Bahrain’s Islamic finance sector
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Pension fund assets in the Middle East and North Africa could be worth $5trn by 2020, and financial analysts forecast that if institutional pension fund investors in the GCC divert just 20% of their current assets under management to the Islamic asset management sector, it could represent a $36bn boost for the industry. With its strong track record of developing new sharia-compliant financial models and its position at the heart of the GCC, Bahrain is well placed to benefit. 2020 Vision Research…