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Bahraini Banking and finance sectors in shipshape

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Points of Essence:

  • Bahrainian Banking and financial sectors had shown a robust growth with total assets of the banking sector rising by 31 per cent to $245.8 billion at end 2007. Financial services make up 27.6 per cent of Bahrain’s GDP, and there are over 400 licenced financial institutions.
  • Playing host to a number of organisations central to the development of Islamic finance including the Accounting and Auditing Organisation for Islamic Financial Institutions, the General Council for Islamic Banks and Financial Institutions, the International Islamic Financial Market and the International Islamic Rating Agency, Bahrain offers a trusted regulatory environment, effective and transparent legislation as well as the best resources and expertise.
  • Low inflation rate at 4.04%, the tremendous growth of the Gulf population to 40 million over the last two years and conducive business environment in Bahrain sets the right ambiance for Bahrain to be the industry trendsetter.

(MENAFN – Bahrain Tribune) Banking and financial sectors had shown a robust growth with total assets of the banking sector rising by 31 per cent to $245.8 billion at end 2007, the Economic Development Board (EDB) in its annual report said.

Inflation in Bahrain, the report maintained, has remained relatively low-running at just 4.04 per cent in 2007 compared with other GCC countries with some of them recorded 14 per cent inflation during the same period. The Gulf region, the report added, with an average sustained growth of 5.5 per cent annually, has become one of the robust economic blocs in the world. The combined gross domestic product of the Gulf Cooperation Council (GCC) is already worth $735 billion and by 2050 could close the gap with G-7 economies.

Regionally, the oil-price windfall has been re-invested in new infrastructure including transport, telecommunications, education, training and health care. Around $1 trillion infrastructure investments are in the pipeline. By 2010 this could reach a total of $3 trillion.

The population of the Gulf has grown 10-fold in 50 years, to 40 million two years ago, one of the highest rates in the world. Highlighting the salient features of Bahrain’s economy, the report added that with its unique location at the heart of the Gulf Bahrain is would continue to be one of the fastest-growing markets in the world.

The report titled Developing Bahrain’s Economy said: “Widely regarded as the best-regulated financial centre in the Middle East, Bahrain has been the region’s undisputed financial capital for more than 40 years. Financial services currently make up 27.6 per cent of Bahrain’s GDP, and there are over 400 licenced financial institutions.

This has created a large pool of local talent.” Of around 10,000 people employed in the industry, 72 per cent are Bahraini, with very high levels of financial skill and expertise. The sector is supervised by the Central Bank of Bahrain, which over the last six years, has functioned as the single regulator for the entire financial system.

This enables businesses in Bahrain to operate throughout the Kingdom with no free-zone restrictions. The Central Bank of Bahrain (CBB) is generally recognised as the most successful monetary authority in the Arab world in terms of regulation, innovation, non-discriminatory treatment, licence management and operational efficiency.

The sector continues to grow strongly with banking assets rising by 33.5 per cent two years ago and by more than 18 per cent in the first half of last year. Bahrain plays host to a number of organisations central to the development of Islamic finance including the Accounting and Auditing Organisation for Islamic Financial Institutions, the General Council for Islamic Banks and Financial Institutions, the International Islamic Financial Market and the International Islamic Rating Agency.

Excellent opportunities for growth remain in mutual funds, fund administration, project finance, private banking and asset management. To enable institutions to take advantage of these opportunities, CBB has created a licence specifically for investment businesses. International banking groups based in Bahrain include BNP Paribas, Citibank, Merrill Lynch, HSBC and Standard Chartered; Middle Eastern banks like Arab Bank, the Arab Banking Corporation, Arcapita, Gulf International Bank, National Commercial Bank Capital, Gulf Finance House and Investcorp with Asian banks such as Bank of China and India’s ICICI. Many insurance groups are also in the country including AIG, Alico, AXA and Zurich.

They enjoy a trusted regulatory environment, effective and transparent legislation as well as the best resources and expertise the region has to offer. In Islamic finance, Bahrain has been an innovator ever since it brought sukuk to the international market.

Bahrain has continued to lead significant growth in this sector and has the largest concentration of Islamic financial institutions in the Middle East including commercial, investment and leasing banks, insurance companies and mutual funds. In the tourism sector, Bahrain offers great potential as both a regional and a world tourist destination, blessed with 33 islands, a cosmopolitan capital city; an attractive, liberal lifestyle and a rich history and culture.

Tourism-sector growth in the region is set to see a 6.7 per cent increase in international tourists by 2010. In the past, Bahrain has focused on niche and boutique tourism as well as the meetings, incentives, conferences and exhibitions sector. Bahrain attracted 4.5 million business and leisure visitors two years ago.

Chaired by Crown Prince Shaikh Salman bin Hamad Al Khalifa, EDB formulates and oversees development strategy. The board is responsible for creating a climate to attract direct investment and for marketing the Kingdom abroad through embassies and overseas offices in Japan, Hong Kong and India.

Source:www.menafn.com

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Written by Suapi Shaffaii

August 5, 2008 at 2:38 am

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