Home Page - Gulf in the Media
HomePoliticsEconomy                               Set Gulfinthemedia.com as home page
 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During the first six months of last year, $ 19bn of liabilities - which includes deposits - were withdrawn from Bahrain's financial system, representing 12 per cent of sector-wide liabilities, according to Moody's.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.
GNTO upbeat on Arabian Travel Market
Source : Gulf Today  
Date : 2017-04-29
The German National Tourist Office (GNTO) has concluded its fruitful participation in the Arabian Travel Market ATM together with 21 partners including the premium partners "Dusseldorf Tourist Board, OutletCity Metzingen...
HMH marks significant announcements at ATM 2017
Source : Gulf Today  
Date : 2017-04-29
On the occasion of its 14th year participating at the Arabian Travel Market, Hospitality Management Holding (HMH), reflects on what was a hugely successful week for the Group with a...
Increased flights to strengthen leisure tourism in Oman
Source : Gulf Today  
Date : 2017-04-29
Increased frequency by Middle East carriers - including Oman Air and more recently, the launch of budget airline carrier Salam Air - to Oman is expected to significantly boost leisure...
NDC concludes Dhs6b mega acquisition project
Source : Gulf Today  
Date : 2017-04-29
With the inauguration of the high-tech jack-up rig Al Lulu, National Drilling Company (NDC), an Abu Dhabi National Oil Company (Adnoc) Group company, has celebrated the completion of its Dhs6...
4000MW of new power plants to come online by Mar. 2018
Source : Tehran Times  
Date : 2017-04-29
Iranian Deputy Energy Minister Houshang Falahatian said that 4000 megawatts (MW) capacity of new power plants is scheduled to be added to the country's electricity network during the current Iranian...
EU commissioner expected in Tehran for arranging 1st Iran-EU energy forum
Source : Tehran Times  
Date : 2017-04-29
European Climate Action and Energy Commissioner Miguel Arias Canete will arrive in Tehran tomorrow to set the ground for holding the first-ever Iran-EU Business Forum on Sustainable Energy, Tasnim news...
World's 1st portable 'amber mosque' in Dubai
Source : Gulf Today  
Date : 2017-04-29
The Dubai-based Amber Palm Group has unveiled worth $1 million (Dhs3.37 million) "portable amber stone mosque" at the iconic Burj Al Arab hotel in Dubai....
UAE set to be top Mena performer
Source : Khaleej Times  
Date : 2017-04-29
The UAE economy is likely to be the best performer in the Middle East and North Africa region, where economy is likely to slow a bit further in 2017 as...
StocExpo Middle East Africa kicks off in Dubai
Source : TradeArabia  
Date : 2017-04-29
StocExpo Middle East Africa, the region's leading exhibition and conference and only dedicated event for the bulk liquid storage industry, got underway yesterday (April 26) in Dubai, UAE....
Bahri logistics and data services promoted at Breakbulk Europe
Source : Saudi Gazette  
Date : 2017-04-29
Bahri, a global leader in transportation and logistics, showcased its comprehensive range of logistics and data services at Breakbulk Europe 2017, which took place in Antwerp, Belgium, recently....
Samsung Pay m-payment service launched in UAE
Source : TradeArabia  
Date : 2017-04-29
Samsung Gulf Electronics announced today the launch of its much-anticipated, flagship mobile payments service, Samsung Pay, in the UAE....
Saudis eye $200 billion in revenue as privatisation drive starts up
Source : Khaleej Times  
Date : 2017-04-29
The Saudi Arabian government believes it can raise around $200 billion in the next several years by selling stakes in state enterprises ranging from hospitals to airports and grain silos....
Diversification programme key to growth
Source : Gulf Today  
Date : 2017-04-29
The new value-added tax (VAT), which ideally fits within the economic diversification programme adopted by the GCC states, and part of growth-oriented governance reform measures, is a step forward toward...
Asia's March imports of Iranian oil rises 27% yr/yr
Source : Tehran Times  
Date : 2017-04-29
Iran's four main Asian oil buyers imported nearly 27 percent more oil from the country in March 2017 compared to March 2016 as Iran took advantage of its exemption from...
The growing popularity of halal tourism
Source : Khaleej Times  
Date : 2017-04-28
The burgeoning islamic economy is one of the fastest growing segments of the global financial industry, driven mostly by the key Islamic principles and values such as the concept of...
AMF may intensify financial inclusion
Source : Khaleej Times  
Date : 2017-04-28
The Council of Arab Central Banks Governors on Thursday stressed on enhancing financial inclusion to achieve sustainable development in the region....
UAE Pavilion highlights role of women
Source : Gulf Today  
Date : 2017-04-28
UAE-based industries are playing a leading role in employing women and advancing capacity development agendas among women, said Ali Majed Al Mansoori at the UAE Pavilion at Hannover Messe, ahead...
Dana Gas completes condensate sale in Egypt
Source : Gulf Today  
Date : 2017-04-28
Dana Gas, the Middle East's largest regional natural gas company, has announced achieving an important milestone with the first international sale of condensate in Egypt under the Gas Production Enhancement...
DIB hosts UAE's top Sharia leaders to lay out direction for compliance
Source : Gulf Today  
Date : 2017-04-28
Dubai Islamic Bank (DIB), the largest Islamic bank in the UAE, has announced that it recently hosted the second UAE Sharia Departments Forum at a local hotel....
Shuaa Capital reports profitable first quarter
Source : Gulf Today  
Date : 2017-04-28
Shuaa Capital has announced its preliminary and unaudited Q1 2017 financial results for the period ended March 31, 2017, with the financial services firm returning to profitability after two years....
Total 620 Results in 31 Pages
For more news, views and reports about this topic, please subscribe
to GRC website: www.grc.net
Sun Apr 30, 2017| 03-شعبان-1438هـ
Syria expands anti-Daesh operations
Riyadh celebrates first Saudi Women's Day
UAE summons Iran's diplomat
Trump turns up the heat on Iran, but no clear game plan yet
Qatar tops world in BMI index for investment attractiveness
Qaeda kills Yemen police, targeted in US raid
Iran targets $8.6bn of refinery deals with Asia firms
UN chief: Syria dialogue must focus on transition for success
US President Trump strongly supports Iraq - envoy
DGCX traded 1.37m contracts valued at $33b in January
Iran rejects 'baseless' warning from US on missile test
GCC consumers spend $9.3 billion on beauty, personal care products
HM King hails parliament's role
Saudi sentenced 7 years in prison for entering Syria, joining Al-Nusra
AD CP, Emir of Qatar discuss ties
NBK Report on oil markets
GCC Banking Sector Quarterly - 2Q16
    GCC Press Agencies
Day's main stories from the GCC Press Agencies
    GRC Analysis
The Benefits of NATO-GCC Strategic Ties
The GCC and the EU's New Global Strategy
    GRC Commentary
Climate COP 22 in Marrakech Important for the Region
Earth Day 2016: The Promised Day
An Evolving Saudi-US Relationship
    GRC Press Release
Gulf Research Center press releases to the media
    GRC Publications
The GCC and the Global Oil Market in 2016
GCC and Regional Issues
GCC Economies: Vision Plans and Outlook
    GRC Newsletters/Bulletins

Enter your email to get the Newsletter
GRC Publication
Privacy Policy | Contact Us | Terms & Conditions | About Us |
Weather | Qibla Directions | Hijri Date Conversion Tool
Full Page :total time:0  |   41-- 41 Middle Page :0  --   | Right : 41 - 41--en--sess-enreq-en-coming