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During the first six months of last year, $ 19bn of liabilities - which includes deposits - were withdrawn from Bahrain's financial system, representing 12 per cent of sector-wide liabilities, according to Moody's.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.
 
Qatar First Bank wins prestigious Islamic finance award
Source : The Peninsula  
Date : 2016-12-03
Qatar First Bank (QIB), a leading Shari'ah compliant bank listed on the Qatar Stock Exchange (QSE), has been recognized as the 'Best Shari'ah Compliant Commercial Bank' in Qatar, at the...
PAYFORT wins Doha Bank Partners Award
Source : Gulf Today  
Date : 2016-12-03
PAYFORT, the leading online payment service provider in the Arab world, has received the Doha Bank Partners Award in recognition for its efforts to develop Qatar's ecommerce sector....
Currency fluctuations a boon for UAE expats
Source : Khaleej Times  
Date : 2016-12-03
Fluctuations in major currencies provided expats in the UAE with favourable rates when it came to sending money back home to their families, industry experts said....
Iran turns the tables on Saudis
Source : Tehran Times  
Date : 2016-12-03
After months of talks and rounds of meetings, the Organization of the Petroleum Exporting Countries (OPEC) finally sealed a deal on November 30 for a production cut, marking a turning...
IPOs raise 'more capital' in the UAE than in USA
Source : Khaleej Times  
Date : 2016-12-03
A noted international economist has said that initial public offerings (IPOs) in the UAE markets raise more capital than they would in the United States....
Global market for biometrics to hit $24.4b
Source : Gulf Today  
Date : 2016-12-03
The rise in emerging technologies comes as the global market for biometrics systems is expected to reach $24.4 billion by 2020, according to research firm MarketsandMarkets, growing annually by 18%...
Qatar and South Korea to enhance cooperation
Source : The Peninsula  
Date : 2016-12-03
The Higher Joint Committee for Strategic Cooperation between Qatar and South Korea held its fourth meeting in the Korean capital Seoul which was chaired by Minister of Energy and Industry...
Iran-India ties at a new turning point
Source : Islamic Republic News Agency  
Date : 2016-12-03
While in India, which is considered as his third visit to this Asian country, Zarif is scheduled to attend and deliver a speech in the Ministerial Conference on Afghanistan called...
Iran-New Zealand ties to grow fivefold
Source : Islamic Republic News Agency  
Date : 2016-12-03
New Zealand Minister of Trade Todd McClay, heading a trade delegation, is to pay a visit to Tehran on Friday aimed at giving an impetus to economic ties in the...
Iran ambassador hails breakthrough in Iran-Russia tourism cooperation
Source : Islamic Republic News Agency  
Date : 2016-12-03
Sanaei, who was speaking in a live interview with Russian radio broadcaster Vesti FM, said the number of tourists in 2015 doubled in comparison to the that a year ago....
Payments to contractors 'strengthen Saudi economic activity'
Source : Arab News  
Date : 2016-12-03
Total bank deposits in Saudi Arabia increased by SR27.1 billion in October, rising by its fastest pace in 13 months, according to economists....
UAE a level playing field for investors
Source : Gulf Today  
Date : 2016-12-03
Amid fluctuations in regional and Western real estate markets, the UAE offers a relatively level playing field to global investors looking for capital value growth and superior rental returns....
Oman oil price sees $4 jump today
Source : Times of Oman  
Date : 2016-12-03
Oman's oil price increased today by 4.07 to reach 49.71 dollars per barrel after Opec agreed its first oil output cuts since 2008....
Qatar's foreign reserves stable at $35.6bn
Source : The Peninsula  
Date : 2016-12-03
While Qatar's total growth accelerated to 2 percent year-on-year (y/y) in 2Q16, the country's non-hydrocarbon sector activity cooled as manufacturing contracted. Gas prices have followed oil prices down, to at...
Iran's agriculture sector welcomes Dutch investment
Source : Tehran Times  
Date : 2016-12-03
Iranian Agriculture Minister Mahmoud Hojjati has said Dutch entrepreneurs and investors are welcomed to participate in Iran's agricultural development projects....
MIDEAST STOCKS-Gulf markets firm as OPEC deal lifts state revenue prospects
Source : Reuters  
Date : 2016-12-02
Petrochemicals companies led Gulf stock markets higher on Thursday in response to OPEC's first agreement on output cuts to prop up oil prices since 2008 -- a deal that could...
Saudi Arabia boosts wealth fund with $27 billion injection
Source : Chicago Tribune-U.S.A.  
Date : 2016-12-02
Saudi Arabia is boosting the firepower of its sovereign wealth fund to accelerate dealmaking and lessen the country's dependence on oil....
Oil producing countries will fare better with a deal
Source : Khaleej Times  
Date : 2016-12-02
It's not just a matter of who will blink first and agree to a cut in oil productions. Despite the assurances and proposals in Algeria in September, the Organisation of...
Saudi stock market hits highest close for 2016
Source : Arab News  
Date : 2016-12-02
Petrochemicals companies led Gulf stock markets higher on Thursday in response to OPEC’s first agreement on output cuts to prop up oil prices since 2008 — a deal that could...
'Saudi banking sector liquidity improves further'
Source : Saudi Gazette  
Date : 2016-12-02
Al Rajhi Capital, one of the Kingdom's largest Investment firms, has published a report titled "Saudi economy - liquidity improves further"....
Total 775 Results in 39 Pages
1 
For more news, views and reports about this topic, please subscribe
to GRC website: www.grc.net
Sun Dec 4, 2016| 04-ربيع أول-1438هـ
Kuwait's opposition 'needs unity' after poll comeback
Mohammed bin Zayed, Sisi discuss ways of deepening ties
Oil price gains from Opec production cut deal seen supporting Gulf markets
Syria operation against terror groups only: Erdogan
Presidential aide hails Iran-Russia agreement on oil market
UN envoy meets Yemen President Hadi in new move to end conflict
Saudi stock market hits highest close for 2016
Iranians face terror charges for filming Israeli Embassy
Trip down prosperity lane: A look back at the UAE's road to success
Austria to bolster ties with Qatar
Joint efforts by Saudi Arabia and UAE helped stabilize region
Zangeneh hails OPEC's crucial decision
Arab League chief urges end to Israeli occupation
Kingdom, OIC express support for Palestinians
  Op-Ed
Collaboration is key to Paris climate deal
Oil producing countries will fare better with a deal
At 45, the UAE deserves a global round of applause
A day for celebration, appreciation and reflection
More>>  
    Reports
NBK Report on oil markets
GCC Banking Sector Quarterly - 2Q16
More>>  
    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
For the GCC States, a different Europe to deal with
    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
Sustainable Development Goals: Challenges and Opportunities for the GCC Countries
Salalah: The Economic Development and Spatial Fragmentation of a Globalized Port City in Southern Oman
Domestic Ramifications of the JCPOA for Iran
    GRC Newsletters/Bulletins

Enter your email to get the Newsletter
Go
A Note on Syrian Refugees in the Gulf: Attempting to Assess Data and Policies
      
Privacy Policy | Contact Us | Terms & Conditions | About Us |
Weather | Qibla Directions | Hijri Date Conversion Tool
Full Page :total time:0  |   27-- 27 Middle Page :0  --   | Right : 27 - 27--en--sess-enreq-en-coming