Bahrain banks on 'strong footing'
Manama, March 7, 2011
Banks in Bahrain remain in a strong position and there has been no flight of deposits out of the country, it was revealed.
That was the message from BBK chief executive officer and chairman of the Bahrain Association of Banks (BAB), Abdulkarim Bucheery, on the sidelines of the bank's annual general meeting (AGM) at the Gulf Hotel yesterday.
He was speaking after the AGM had been held up from starting at the appointed time as shareholders arrived late because of traffic disruption caused by the latest protest rally that set off from the Gulf Hotel, which closed its gates and its main entrance because of the demonstrators.
"Neither BBK nor any other bank I am aware of has suffered seriously to date but if this political uncertainty goes on it will be damaging to the banks," he said.
"We need to see the start up of the dialogue initiated by His Royal Highness Prince Salman bin Hamad Al Khalifa, Crown Prince and Economic Development Board chairman.
"Some banks have already been affected but I am not aware of any specific bank that has problems.
"It is still not anything to be particularly worried about but if it continues it will be a problem."
"Some international banks are cutting credit lines to banks which are operating in Bahrain," he said.
"So far there has been no flight of capital. We at BBK have not lost any deposits and indeed have received some substantial deposits from government institutions from across the region recently, and we are talking of large sums of money."
He said that BAB chief executive Robert Ainey would be talking to the international banks and liaising with them and the Central Bank of Bahrain about the situation.
"Last year was one of expansion for BBK and we will be looking for further expansion this year," he continued.
"But we will be looking for the situation to settle both here and across the region before we go ahead with specifics.
"We are looking to open two more branches in India to add to the two we already have but we are waiting for approval from the Reserve Bank of India."
He added that the bank continued to support its clients and customers.
"It is our duty to be with our customers and support them at this time."
The impact of the global economic crisis was still felt by BBK throughout 2010 but on the positive side there were signs of recovery of the economy in the developed markets.
Strong growth in the developing countries continued and there was an increase in the stock market and commodities prices including oil.
He said Bahrain's Economic Vision 2030 sets out road map for further diversification which was good for the industry.
BBK achieved a record net profit of BD39.15 million ($104 million) last year, total assets grew by seven per cent to reach BD2.447 billion and customer deposits increased by 5 per cent to reach BD1.594 billion.
The bank's investments portfolio increased by 19 per cent, making solid contribution to 2010 net profit.
Fee income from underlying business growth increased by 13 per cent and the bank had a comfortable capital adequacy level at 18.6 per cent and strong liquidity level.
BBK's subsidiary CrediMax continued to perform well and to maintain its leading position in the credit card market while Capinnova establishes itself more strongly in the market with a good performance and the bank's customer service call centre business Invita was exploring opportunities to expand in Mena region.-TradeArabia News Service