Home Page - Gulf in the Media
HomePoliticsEconomy                               Set Gulfinthemedia.com as home page
Economy
 Print  Send This Page
Save Listen to this Article
Arcapita failure puts focus on Bahrain   

The National - 24 March, 2012

Bahrain's banking sector has come under intense scrutiny after one of its flagship investment banks filed for bankruptcy protection.

Arcapita Bank sought protection under Chapter 11 of the US Bankruptcy Code on Monday after it failed to secure agreement from its creditors on a US$ 1.1 billion (Dh4.04bn) debt facility that was due to mature this month.

Bahrain's financial sector contributes about one third of the country's GDP and employs about 3 per cent of the nation's workforce, according to the IMF. But the total assets of its banking sector are about 12 times the size of its economic output and the government lacks the wealth of other oil-rich Gulf states.

Bahrain's offshore banking sector, which recycles international liquidity throughout the Gulf, is heavily reliant on funding from European banks, which are quickly withdrawing capital amid sector-wide deleveraging as a result of the euro-zone sovereign-debt crisis.

"The volatile nature of foreign liabilities placed in Bahrain's wholesale banks was exposed during the Arab Spring," analysts from Moody's Investors Service wrote in a report released on Monday.

"Direct exposure to the domestic operating environment is limited but increased risk perception and sustained outflows would trigger a significant slowdown in business volumes and pose some serious structural challenges for this industry."

During the first six months of last year, $ 19bn of liabilities - which includes deposits - were withdrawn from Bahrain's financial system, representing 12 per cent of sector-wide liabilities, according to Moody's.

Banks have also redeployed staff from Bahrain to other points in the region throughout the past year.

BNP Paribas, the biggest international lender in the kingdom, relocated as many as 30 employees from its wealth management division to Dubai, according to sources close to the bank.

Crédit Agricole closed its Middle East office in Manama to move staff to Dubai last August, Reuters reported at the time.

Société Générale also closed its private-banking office in the country as part of a cost-cutting drive, centralising its Middle Eastern private-banking operations in Dubai.

Bahrain's banking system had some differentiating factors that could convince foreign capital to stay put, particularly in the Islamic finance and asset management industries, said Jean-Michel Saliba, a Middle East economist at Bank of America Merrill Lynch.

"They have some advantages, but they've been eroded by the geopolitical uncertainty in Bahrain, and there's no clear way of how they're going to resolve this," he said.

Liquidity injections worth €1 trillion (Dh4.87tn) provided by the European Central Bank to European banks beginning last year, may slow the withdrawal of funds from Bahrain and elsewhere in the Gulf, but it would not reverse it, Mr Saliba said.

A number of hedge funds and asset managers have withdrawn operations in favour of Dubai, with some citing the kingdom's political unrest last year as the final straw.

Others pointed to regulatory uncertainties after the collapse of The International Banking Corporation and Awal Bank.

The investment fund industry, which manages assets equivalent to about 80 per cent of Bahrain's GDP, was fearing a hit from any regulatory backlash against the financial services sector, said one private banker at a major Swiss bank.

Yields on Bahrain's 10-year government bonds, which pay a coupon of 5.5 per cent, initially rose by 35 basis points to 5.74 per cent in tradingsince Arcapita filed for protection from its creditors. They have since retreated to 5.716 per cent.
 
QE index falls 72.37 points past week, Ezdan gains
Source : The Peninsula  
Date : 2015-05-22
The real estate sector was the only gainer, supported Ezdan and Mazaya Real Estate Development by 3.08 percent and 2.54 respectively....
Cabinet, SCPD approve development plan bill
Source : Kuwait Times  
Date : 2015-05-22
The cabinet and the Supreme Council for Planning and Development (SCPD) yesterday approved a draft bill on the state’s second annual development plan, 2016-2017. It will later be referred to...
Amanat buys 4.14% stake in Al Noor Hospitals
Source : Khaleej Times  
Date : 2015-05-22
Amanat Holdings, the recently formed healthcare and education start-up, said on Thursday that it bought a 4.14 per cent stake in London-listed UAE healthcare firm Al Noor Hospitals from Deutsche...
Dewa honours strategic partners
Source : Khaleej Times  
Date : 2015-05-22
The Dubai Electricity and Water Authority (Dewa) has organised its annual strategic partners appreciation ceremony to honour the role of Dewa’s strategic partners and support its commitment to strengthen its...
Index 2015 concludes on a successful note
Source : Khaleej Times  
Date : 2015-05-22
The largest and longest-running events for the residential and commercial interior design industry across the Mena region, Index International Design Exhibition and workspace at Index has concluded after a hive...
Taqa plans to raise $3.5bn loan
Source : Gulf Daily News  
Date : 2015-05-22
Abu Dhabi National Energy Company (Taqa) is looking to raise a $3.5 billion loan as it seeks to consolidate a number of existing debts into one facility with a lower...
Smartphone shipments post growth in Middle East
Source : Gulf Daily News  
Date : 2015-05-22
As premium brands shift to the digital arena, the news from the Middle East about the rise of smartphones is likely to further boost the luxury sector's fortunes....
Bidding set
Source : Gulf Daily News  
Date : 2015-05-22
Oman's United Finance yesterday said that National Bank of Oman had confirmed interest in taking part in a bidding process for a possible acquisition of the company....
Fitch Ratings' role is praised
Source : Gulf Daily News  
Date : 2015-05-22
Energy Minister Dr Abdulhussain Mirza yesterday met a delegation from the international credit rating agency, Fitch Ratings, led by the director of the Sovereign Group, JP Morgan, Paul Gamble, and...
Sustainability in investing discussed
Source : Gulf Daily News  
Date : 2015-05-22
Major trends and issues relating to sustainability in investing and Islamic finance and sukuk came up for discussion at a key event....
Workshop to focus on liquidity risk
Source : Gulf Daily News  
Date : 2015-05-22
The General Council for Islamic Banks and Financial Institutions (CIBAFI), a global umbrella of Islamic financial institutions, has announced it is holding a technical workshop on liquidity risk management next...
Mobily officials may face action
Source : Gulf Daily News  
Date : 2015-05-22
Saudi Arabia's market regulator has recommended nine current or former officials at Saudi Arabian telecom operator Mobily be prosecuted for violations that include insider trading, a local financial news website...
ABC finances key jet leasing transaction
Source : Gulf Daily News  
Date : 2015-05-22
Bahrain-based Arab Banking Corporation (ABC) yesterday announced it has provided a financing facility to Oman Brunei Aviation Leasing Company (OBALC)....
BIBF-DinarStandard to launch key programme
Source : Gulf Daily News  
Date : 2015-05-22
BIBF, in partnership with DinarStandard, is launching the world's first training programme on the Convergence of the Halal Market Economy and Islamic Capital next month....
My Identity; My Industry seminar held
Source : Oman Daily Observer  
Date : 2015-05-22
The Women and Industry Seminar titled "My Identity; My Industry" was held at the Crowne Plaza hotel in Salalah yesterday under the auspices of Sayyid Mohammed bin Sultan bin Hamoud...
Dhofar signs MoUs with PDO
Source : Oman Daily Observer  
Date : 2015-05-22
The Office of the Minister of State and Governor of Dhofar yesterday signed two Memoranda of Understanding (MoUs) with Petroleum Development Oman (PDO). As per the MoUs, PDO will build...
Italy wants to take ties with KSA to next level
Source : Arab News  
Date : 2015-05-22
Italy and Saudi Arabia enjoy excellent relations as the former marks its 69th national day on June 2, according to Italian Ambassador Mario Boffo....
MSM index down 22 points
Source : Oman Daily Observer  
Date : 2015-05-22
Muscat Securities Market (MSM) general index (30) yesterday lost 22.29 points to close at 6,383.35....
Oman Convention & Exhibition Centre shines on world stage
Source : Oman Daily Observer  
Date : 2015-05-22
The Oman Convention & Exhibition Centre (OCEC), the Sultanate's landmark business events hub, revealed its latest 3D structures and aerial drone images in the lead up to the opening in...
Oman Philately Association opens first exhibition, launches logo
Source : Oman Daily Observer  
Date : 2015-05-22
Oman Philately Association (OPA) yesterday opened the first exhibition after a year of declaration, as well as launching the logo and the issuance of special stamps on the occasion of...
Total 1728 Results in 87 Pages
1 
For more news, views and reports about this topic, please subscribe
to GRC website: www.grc.net
Sat May 23, 2015| 04-شعبان-1436هـ
Three South Korea MERS cases have origin in GCC
Al-Naimi sees eventual end of fossil fuels
More strikes as Houthis pay the price for rejecting Riyadh conference demands
Gulf banks expand role as syndicated lenders
Alarm as half of Syria under IS control
Gulf markets edge up as oil prices rise; Egypt resumes rally
Media's role vital in spreading culture of tolerance: UAE
Minister calls for intensifying efforts to spur GCC economy
Bahrain oppn leader to be sentenced next month
UAE companies can improve business performance with CSR
Al-Ghanim condemns Israel's continued detention of Palestinian MPs
93.3 per cent Omanisation in local banks: CBO data
Qatar Ministry slams Amnesty over labour claims
Kuwait's Al Ahli Bank buying Piraeus Bank Egypt for $150mn
Iran warns Israel of Hezbollah rockets if attacked
Iraqi forces thwart Daesh attack east of Ramadi
    Newspaper Editorials
Camp David summit: GCC made its point
Let UN talk to Houthis for peace in Yemen
More>>  
    Opinions
Conspiracy Theories on ISIS Gains in Iraq
Changing the rules of the game
More>>  
    GCC Press Agencies
Day's main stories from the GCC Press Agencies
    Reports
The Arab-U.S. Strategic Partnership and the Changing Security Balance in the Gulf
More>>  
    Bank Reports
Saudi Arabia Banking Sector
GCC Equity Monitor - Global
More>>  
    GRC Analysis
Saudi Arabia and the ASEAN Periphery: Cambodia, Myanmar, and Brunei
NATO and the Future of Gulf Security.
Saudi-Vietnam Relations
    GRC Commentary
Price of not heeding Kingdom's advice
On Relations between Rulers and Citizens: The Need for a New Social/Political Contract in the GCC States
Key Issue Facing the Saudi Ruling House.
    GRC Book Review
Beyond Regionalism? Regional Cooperation, Regionalism and Regionalization in the Middle East
India, GCC and the Global Energy Regime: Exploring Interdependence and Outlook for Collaboration.
    GRC Press Release
Gulf Research Center press releases to the media
    GRC Publications
Demography, Migration, and the Labour Market in Bahrain
Islamic Finance: A three-volumes series.
United Arab Emirates’ Legal Framework of Migration
    GRC Newsletters/Bulletins

Enter your email to get the Newsletter
Go
      
Privacy Policy | Contact Us | Terms & Conditions | About Us |
Weather | Qibla Directions | Hijri Date Conversion Tool
Full Page :total time:0  |   39-- 39 Middle Page :0  --   | Right : 39 - 39--en--sess-enreq-en-coming