Banking

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.