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During the first six months of last year, $ 19bn of liabilities - which includes deposits - were withdrawn from Bahrain's financial system, representing 12 per cent of sector-wide liabilities, according to Moody's.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.
 
Organisation of Russian Compatriots in Qatar lines up activities for 2015
Source : The Peninsula  
Date : 2014-10-25
The first conference of Organisation of Russian Compatriots in Qatar yesterday at Diplomatic Club witnessed the official start of activities of its newly-established Coordinating Council....
Spectre of secular stagnation
Source : Khaleej Times  
Date : 2014-10-25
Former US Treasury Secretary Lawrence Summers and Nobel laureate Paul Krugman are among prominent intellectuals who have compiled a study into "secular stagnation", an idea that suggests advanced economies may...
The 'politics' behind oil price fall
Source : Arab News  
Date : 2014-10-25
It is no longer a issue of whispering in the corridors of the oil industry. It is now part of public debate. Is Saudi Arabia launching an oil price war...
Sport ambulance vehicles recruited
Source : Gulf Today  
Date : 2014-10-25
The Dubai Corporation for Ambulance Services has entered three luxurious sport ambulance vehicles within its fleet to serve patients in the emirate of Dubai....
GCC ministers, central banks' governors discuss joint policies
Source : Kuwait News Agency  
Date : 2014-10-25
GCC ministers of financial and economic affairs and central banks' governors began here on Saturday a joint meeting, aimed at reaching common perspective regarding key issues of common interest in...
Foreign tourists in Iran to boost production, jobs
Source : Islamic Republic News Agency  
Date : 2014-10-25
The arrival of foreign tourists in the Islamic Republic can play a great role in increasing production and job opportunities across the country....
Glass LLC unveils new technologies
Source : Khaleej Times  
Date : 2014-10-25
Glass LLC, the first glass holding company in the Middle East and a subsidiary of Dubai Investments, unveiled the latest industry innovations and revolutionary concepts at Glasstec 2014, the largest...
Mashreq to offer cashback for SouqPlanet shoppers
Source : Khaleej Times  
Date : 2014-10-25
Leading UAE financial institution Mashreq announced that it has forged a new partnership with National Catering Company, or NCC, one of the largest organisations in the UAE specialising in catering,...
Flydubai growing rapidly in East Africa
Source : Khaleej Times  
Date : 2014-10-25
In 2014, flydubai added six new routes to the continent with the start of flights to Burundi, Rwanda, Uganda and three destinations in Tanzania....
Dewa holds workshops for stakeholders
Source : Khaleej Times  
Date : 2014-10-25
The Dubai Electricity and Water Authority, or Dewa, organised a number of workshops for its partners and stakeholders at its headquarters, coinciding with World Energy Day 2014 celebrated each year....
Yoku Moku opens two new stores
Source : Khaleej Times  
Date : 2014-10-25
Yoku Moku, the internationally-renowned Japanese confectionary brand, announced the opening of two new signature stores at Al Ghurair Mall in Dubai and Al Qasba in Sharjah, targeting to keep the...
Premier Inn plans further expansion
Source : Khaleej Times  
Date : 2014-10-25
Premier Inn is on track to increase the Middle East’s mid-market hotel inventory as part of aggressive international expansion and adding almost 6,000 new rooms In GCC, India and Southeast...
Al Marjan Island lifting RAK tourism
Source : Khaleej Times  
Date : 2014-10-25
Al Marjan Island is expected to notch up higher growth rates in the coming period as more investors are eyeing investments in tourism, hospitality, shopping, housing and business....
Ideal Sapanca launches Dh55.2 million project
Source : Khaleej Times  
Date : 2014-10-25
Ideal Sapanca, a UAE and Turkish entrepreneurship company, recently announced the launch of the FCC Sapanca Residences — a full lake view housing project located in Sapanca, Turkey....
Jeema Water goes pink for the month
Source : Khaleej Times  
Date : 2014-10-25
Jeema Water, the well known UAE bottled water from the Hatta mountains, has turned pink for the month of October, in support of the International Breast Cancer Awareness Campaign....
Mall of the World to boost local retail, tourism scene
Source : Khaleej Times  
Date : 2014-10-25
The highly-ambitious Mall of the World project, which caused a sensation upon its announcement in July this year, will capitalise on the projected increase in visitors to the UAE, with...
Al Ghurair Centre scoops four awards
Source : Khaleej Times  
Date : 2014-10-25
Dubai’s original shopping mall picked up two golds, and a silver award at the 2014 Middle East and North Africa Shopping Centre Awards earlier this month....
bYSI's unveils autumn, winter 2014 collection
Source : Khaleej Times  
Date : 2014-10-25
Basic colours and minimalistic modern silhouettes — this is what the bYSI fall collection represents. With some of the biggest trends on the runway being ladylike skirts, sumptuous tops, geometric...
'Green' valet parking launched by Valtrans
Source : Khaleej Times  
Date : 2014-10-25
Valtrans, UAE’s multi award winning transportation systems and services launched the new and innovative 100 per cent paperless valet parking systems — The Green Valet Parking. It is the first...
Milestone for Emaar with the launch of The Address project in Turkey
Source : Khaleej Times  
Date : 2014-10-25
Emaar Turkey, the wholly-owned subsidiary of Emaar Properties, on Friday marked the global launch in Dubai of The Address Residence Istanbul, a premium collection of five-star serviced residences, which are...
Total 1648 Results in 83 Pages
1 
For more news, views and reports about this topic, please subscribe
to GRC website: www.grc.net
Sat Oct 25, 2014| 01-محرم-1436هـ
US looking into possible chlorine gas attack in Iraq: Kerry
Saudi nonoil exports up 22% to SR18.5bn in August
GCC vows tough steps to curb 'media extremism'
UAE e-Commerce industry to hit $10 billion
Deviant ideology has no place in Islam: Al-Sudais
QAFCO to seek profit in niche fertilizer products
Masked men burn Saudi consulate cars in Egypt
886 ships anchored in Aden port during January – September
Yemen tribesmen blow up key oil pipeline
GCC keen on int'l oil markets' stability: CBK Governor
Qatar's re-election to HRC confirms global faith, says Minister
70% of Makkah Mashaer Metro staff are Saudi
3rd Parl't session to see more legislative achievements - Al-Ghanim
Iran implementing energy projects in Iraq worth over $1.3 billion
UAE committed to protecting rights of foreign workers
Abu Dhabi's biggest mall eyes Dubai, GCC patrons
    Newspaper Editorials
Tunisia hopes landmark elections will anchor stability
UAE will remain attractive place of opportunity
More>>  
    Opinions
Behind Yemen's crises
The destructive ideology
More>>  
    GCC Press Agencies
Day's main stories from the GCC Press Agencies
    Reports
Justice in Transition in Yemen
The United Arab Emirates (UAE): Issues for US Policy
More>>  
    Bank Reports
GCC Markets Performance – May 2014
Saudi Arabia: Baseline Macroeconomic Forecast 2014-16
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
Labor Market Integration in the GCC Countries
Integration Processes in Latin America
GCC’s External Trade Integration: An Assessment
    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  |   12-- 12 Middle Page :0  --   | Right : 12 - 12--en--sess-enreq-en-coming