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During the first six months of last year, $ 19bn of liabilities - which includes deposits - were withdrawn from Bahrain's financial system, representing 12 per cent of sector-wide liabilities, according to Moody's.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.
7 'happy' Iranians get suspended jail, lashes
Source : Arab News  
Date : 2014-09-20
Seven young Iranians featured dancing to Pharrell Williams' hit "Happy" in a video that went viral on the Internet have been given suspended jail and lashes sentences, a lawyer said...
Jeddah registers highest number of mid-day work ban violations
Source : Arab News  
Date : 2014-09-20
The three-month ban on laborers working in high temperatures during the day has resulted in the highest number of violations ever with the construction sector being hardest hit owing to...
India-Bahrain ties gaining momentum
Source : Gulf Daily News  
Date : 2014-09-20
Indian Foreign Minister Sushma Swaraj's visit this month to Bahrain signalled New Delhi's first diplomatic and strategic outreach to Manama since Prime Minister Narendra Modi's election on May 26....
Silence on MH 17
Source : Khaleej Times  
Date : 2014-09-20
Europe's mainstream media have followed the lead, and have over the last fortnight scarcely reported any new development pertaining to the investigation into the causes of the crash of MH...
Revolutionary BMW i8 arrives in Saudi Arabia
Source : Saudi Gazette  
Date : 2014-09-20
With its ultra-dynamic proportions, elegantly sporty lines, low-slung silhouette and futuristic design features, BMW’s i8 plug-in hybrid sports car is expected to cause a sensation on the roads when it...
Serbia wants to set up joint projects with UAE
Source : Khaleej Times  
Date : 2014-09-20
During President Nicolic's reception of General Shaikh Mohammed and his accompanying delegation at the presidential palace in Belgrade, the former expressed his hope that the visit would contribute to pushing...
Indian official: Chabahar port development, pivotal
Source : Islamic Republic News Agency  
Date : 2014-09-20
A senior Indian official stressed the importance of developing the southern Iranian port of Chabahar for the transit of Indian products to other countries....
Trilateral railroad investment proposed with Russia, Azerbaijan
Source : Islamic Republic News Agency  
Date : 2014-09-20
Roads and Urban Development Minister Abbas Akhoundi announced Iran’s proposal for a trilateral investment with Azerbaijan and Russia for completing the Qazvin-Rasht-Anzali-Astara Railroad....
Completion of refining projects will make Iran needless of gasoline imports
Source : Islamic Republic News Agency  
Date : 2014-09-20
Managing Director of the National Iranian Oil Refining and Distribution Company (NIORDC) says completion of plans for four million liters increase in gasoline production capacity of Abadan and Bandar Abbas...
Russian firms eye Iran gas pipeline projects
Source : Islamic Republic News Agency  
Date : 2014-09-20
Russian companies have voiced their readiness to construct sixth, seventh, ninth and 11th cross-country pipelines to increase gas export, the head of National Iranian Gas Company’s Investment Committee said....
CNG consumption up 1400 fold in a decade
Source : Islamic Republic News Agency  
Date : 2014-09-20
Managing Director of Iran Fuel Conservation Company says CNG consumption in public transportation sector has gradually increased from about 5 million cubic meters in 2002 to about 7 billion cubic...
Jubail airport handles first civilian flight
Source : Arab News  
Date : 2014-09-20
The first civilian aircraft landed at Jubail airport on Thursday morning, marking its transformation from a purely military facility....
Factories ignore safety rules
Source : Arab News  
Date : 2014-09-20
Many factories and workshops in the Kingdom do not abide by safety and security standards to protect their buildings against fires. Such factories also do not maintain their air conditioning...
Bourse remains in higher trajectory near 14,400 mark
Source : Gulf Times  
Date : 2014-09-20
Foreign institutions’ net bought equities worth QR264mn to place the Qatar Stock Exchange in a higher trajectory near the 14,400 mark during the week as Standard and Poor’s-Dow Jones officially...
Investors to bank on UAE's vibrant real estate market
Source : Khaleej Times  
Date : 2014-09-20
The 13th edition of Cityscape Global will see a very strong turnout from visitors across the world — in particular the United Kingdom, India and Pakistan — as they look...
Financial literacy portal Foolosy.com launched
Source : Khaleej Times  
Date : 2014-09-20
The launch of the platform was announced by AbdulAziz Al Ghurair, Mashreq chief executive officer, in a Press conference, which is meant to make customers more knowledgeable about financial know-how....
MoE, US TRO discuss cooperation
Source : Khaleej Times  
Date : 2014-09-20
Al Kit briefed Buntin on the latest major economic developments taking place in the UAE and efforts being made by the UAE government to maintain its prominent economic and trade...
Two awards for Dubai Duty Free
Source : Khaleej Times  
Date : 2014-09-20
Dubai Duty Free president George Horan received the awards on behalf of Dubai Duty Free....
New UK ambassador tours DP World
Source : Khaleej Times  
Date : 2014-09-20
Together with senior company officials, Bin Sulayem also outlined the progress of DP World London Gateway, which is adding 3.5 million twenty-foot equivalent container units to the UK’s port capacity....
Medcare inaugurates 7th medical centre in Mirdif
Source : Khaleej Times  
Date : 2014-09-20
Medcare, a premium private medical provider in the UAE and part of the leading healthcare conglomerate Aster DM Healthcare, has launched its seventh Medcare Medical Centre (MMC) in the UAE....
Total 1639 Results in 82 Pages
For more news, views and reports about this topic, please subscribe
to GRC website: www.grc.net
Sun Sep 21, 2014| 26-ذو القعدة-1435هـ
French jets launch first strike on IS
Women investors beat men in stock market
Yemeni Houthis agree to stop fighting 
Dubai Design District master plan set to be unveiled
Iran moving to comply with extended N-deal: IAEA
Brokerage firm staffers jailed for theft of shares worth QR17.7mn
Cool response to new Bahrain dialogue offer
Kuwait's real estate activity in August muted due to seasonal lull: report
Qatar concerned over nuclear proliferation
Iranˈs electricity export rises 3.3 percent
Al-Khurainej mulls efforts to release Abducted Kuwaiti citizen in Lebanon
Yemen seeks to increase LNG sale returns
ISIL threatens entire region - Iraqi FM
IT 'will aid Qatar rise in knowledge economy index'
Kuwait praises Qatar's human right efforts
Mullet fishing banned pending fish kill investigation
    Newspaper Editorials
Suspense ends, unity prevails
Silence on MH 17
Yemen must end it ... now
Iran talks resume, time to play 'Let's make a deal'
    GCC Press Agencies
Day's main stories from the GCC Press Agencies
Iran and the P5+1: Getting to 'Yes'
    Bank Reports
GCC Markets Performance – May 2014
Saudi Arabia: Baseline Macroeconomic Forecast 2014-16
    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
Regional Disorder and New Geo-economic Order: Saudi Security Strategies in a Reshaped Middle East
GCC Economic Integration: Focus on Nitty-Gritty of Convergence rather than High Profile Projects
Promoting GCC Regional Integration: An Environmental Perspective
    GRC Newsletters/Bulletins

Enter your email to get the Newsletter
Privacy Policy | Contact Us | Terms & Conditions | About Us |
Weather | Qibla Directions | Hijri Date Conversion Tool
Full Page :total time:0  |   50-- 50 Middle Page :0  --   | Right : 50 - 50--en--sess-enreq-en-coming