Banking
From The Report: Bahrain 2017
View in Online Reader

Bahrain’s banking sector has managed two years of a challenging low oil-price environment without seeing significant deterioration in its financial stability indicators. Conventional lenders and Islamic financiers operating within the kingdom’s famously robust regulatory framework have also managed to maintain profitability throughout this period thanks to efficiency drives and continued government spending on large infrastructure projects. However, with the industry facing a third successive year of low oil prices, efforts to maintain growth margins are becoming more challenging.

This chapter contains an interview with Jean-Christophe Durand, CEO, National Bank of Bahrain.

Articles from this Chapter

Overview

Centre of excellence: Kingdom combats declining growth with regulatory vigilance
OBG
plus

Bahrain’s banking sector has managed two years of a challenging low oil price environment without seeing significant deterioration in its key financial stability indicators. Both conventional lenders and Islamic financiers operating within the kingdom’s robust regulatory framework have also managed to maintain profitability throughout this period thanks to efficiency drives and continued government spending on large infrastructure projects. However, with the kingdom’s banking industry…

Analysis

Further afield: Local limitations are encouraging sector players to look abroad
OBG
plus

The ability of Bahrain’s government to maintain its infrastructure development programme and a GDP per capita of nearly $50,000, according to KPMG, should combine to generate ample opportunities for the kingdom’s banks to grow their assets. However, potential sector expansion is limited by the fact that the domestic market, characterised by a small number of blue chip corporates and a modest population of just 1.32m, is a relatively small one, even by GCC standards. One way for banks…

Interview

A resourceful partner: Jean-Christophe Durand, CEO, National Bank of Bahrain (NBB), on supporting domestic development
OBG
plus

Interview: Jean-Christophe Durand With the government deficit currently around 15% of GDP, how do you see Bahrain’s fiscal situation evolving over the next few years? JEAN-CHRISTOPHE DURAND: Given the outlook of low oil prices in the medium-term, fiscal deficit will continue to be a challenge for the government. Bahrain has taken several measures to ease the financial burden, such as lifting subsidies, cutting costs and increasing fees for government services. Value-added tax is also likely to…

Analysis

Reasons for optimism: Despite ratings downgrades, multiple factors promise resilience
OBG
plus

The decline in oil prices since the second half of 2014 has focused attention on the liquidity position of the kingdom’s banking sector, and its consequent ability to achieve lending growth. The issue is a regional rather than a purely local one. The prominence of hydrocarbons revenues on the balance sheets of GCC governments means that they are particularly vulnerable to the movements of oil and gas spot prices and futures contracts. The high energy prices of the last decade have been…