Bahrain financial sector healthy, assures CBB
Manama, June 2, 2009
The Central Bank of Bahrain gave its financial sector overall a clean bill of health but said Awal Bank, which is controlled by Saudi billionaire Maan Al-Sanea either directly or through Saad Group, has sought to restructure its debt.
'We have requested their management to hold a meeting with its creditors as soon as possible,' the central bank said in a statement.
Awal Bank was not immediately available for comment.
Privately-held Saad Group sent shockwaves through the Gulf on Monday, saying it plans to restructure the debt of its units hurt by a liquidity squeeze brought on by the financial crisis as ratings agency Moody's cut its ratings on the group to junk.
The restructuring and the downgrade will rattle a $30 billion empire built by Al-Sanea, chairman of the Saad Group.
Saudi bankers say Saad Group's accounts have been frozen by the Saudi central bank.
The group did not disclose the size of the debt restructuring or the number of the companies affected, saying only it was facing short-term liquidity problems from global turmoil and unspecified events affecting the Bahraini banking sector.
On Tuesday, Bahrain's central bank said the problems were specific to Awal and not indicative of Bahrain's banking system overall.
Bahrain has established itself as a regional banking centre with a sound regulatory system.
'The issues connected with Awal Bank are a consequence of events in the wider Al Saad group and are unrelated to the wider Bahraini banking sector, which has otherwise continued to function normally,' the central bank said. - Reuters