Bahrain's Banking Sector Growing 20% Year on Year
Bahrain's momentum continues as world’s fastest growing financial centre, with six new banking operations announcing commencement of operations so far in 2008
Manama, Bahrain, 2 June 2008 - Bahrain's banking sector has grown at an unprecedented pace during the first quarter of 2008 following the announcement of a series of ventures involving international banks in the Kingdom. In addition, a new report by the Securities and Investment Company has predicted that this healthy development is set to continue into the future with 20% growth per year expected for the next three years at least.
The longest established financial centre in the Gulf, Bahrain continues to attract world-class financial and professional services companies from around the world. These businesses are choosing to establish operations in Bahrain to take advantage of its strong economic growth and its leading position as a commercial hub.
In April this year, one of Bahrain's leading financial service providers, Ahli United Bank (AUB) announced that it had signed a memorandum of understanding with the UK -based firm Legal and General Group, which will see it offering investment services and Sharia-compliant insurance. The partners will each have a 50 per cent stake in the new venture, which will be headquartered in Bahrain and service the Gulf region.
Bank of Baroda, a leading Indian lender with global operations in 24 countries, commenced operations in Bahrain in March earlier this year. The Bank targets high net worth individuals and corporations with its initial project to syndicate a $100 million loan for a Bahrain-based customer.
HDFC Bank, India's second largest non-governmental bank, has also been awarded a license by the GCC’s leading regulator, the Central Bank of Bahrain, to establish a wholesale banking branch, the first such HDFC foreign venture.
The banking industry is the largest employer in Bahrain’s financial sector and the Central Bank of Bahrain’s recent employment survey showed that the workforce expanded by 20.6% over 2007 to support this rapid growth.
Commenting on these new developments in Bahrain's banking sector, Shaikh Mohammed bin Essa Al-Khalifa, Chief Executive of the Economic Development Board (EDB) of Bahrain said:
"We are delighted with the surge of recent activity in our banking sector. The relocation of many high profile international banks to the Kingdom is testament to our continued support and liaison with the private sector and commitment to creating the most well regulated business-friendly environment.
“The boom in Bahrain’s banking sector is evidence of the hard work of the professionals working in the sector, particularly our skilled Bahraini professionals. The EDB facilitates the establishment of business in Bahrain, and we will continue to encourage overseas banks to consider Bahrain’s many advantages during their decision making process when locating operations to the Middle East.
"We fully expect 2008 to be our best year yet in the banking sector as Bahrain continues with its rapid economic growth and surging development in banking and finance, maintaining our position as the region’s leading financial centre."
This flow of investment from within the Gulf region is expected to continue during the remainder of 2008 and beyond. In February 2008, Gulf Finance House, an Islamic wholesale bank based in Bahrain, announced it would start a Sharia-compliant investment bank dedicated to the energy sector to service the increasing demand for spending on energy in the region, currently estimated at US$56 million a year. The bank's planned start up would see it capitalised at US$750 million.
In January 2008 Michael Tomalin, Chief Executive of the National Bank of Abu Dhabi indicated to Gulf media that the bank would be opening a branch in Bahrain as part of a global expansion plan, which will also see additional offices opening in Hong Kong, Libya and Jordan.
-ENDS –
For more information on Bahrain EDB, please contact:
Rania Al Shirawi, Director of Global Communications
Bahrain Economic Development Board (EDB)
Telephone: +973 17 589 999
Email: rania.alshirawi@bahrainedb.com
Natasha Sterling
Promoseven Weber Shandwick
Telephone: +973 3 995 6730
Email: Natasha.sterling@promoseven.com
Notes to Editors
About The Bahrain Economic Development Board (EDB)
The Bahrain Economic Development Board (EDB) is a dynamic public agency with an overall responsibility for formulating and overseeing the economic development strategy of Bahrain, and for creating the right climate to attract direct investment into the Kingdom.
More information on the Bahrain EDB is available here: www.bahrainedb.com
Bahrain Financial Services Development is a department of the Economic Development Board which is uniquely dedicated to the needs of the financial services industry and provides a single point of contact for international financial services firms looking to build a base in the Kingdom.
More information on Bahrain Financial Services is available here: www.bahrainfs.com