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During the first six months of last year, $ 19bn of liabilities - which includes deposits - were withdrawn from Bahrain's financial system, representing 12 per cent of sector-wide liabilities, according to Moody's.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.
 
Emirates Global Aluminium plans IPO, banks pitch for role
Source : Arab News  
Date : 2017-03-22
Emirates Global Aluminium (EGA), one of the world’s top five producers, has invited banks to pitch for a role in its planned initial public offering, sources told Reuters....
Tadawul institutional ownership rises further but different drivers
Source : Saudi Gazette  
Date : 2017-03-22
After reaching multi-year lows during August-September 2016, Saudi Stock Exchange (Tadawul)'s traded value increased to hit a 8-month high in December 2016 with the market gaining 28% during that period,...
UAE publishes VAT timetable; excise tax roll out in 2017
Source : Khaleej Times  
Date : 2017-03-22
The UAE Ministry of Finance has launched the first phase of its awareness and education workshops that will prepare businesses for the new tax system that will be introduced by...
Total volume of UAE personal loans reaches Dhs349.9 billion
Source : Gulf Today  
Date : 2017-03-22
Total volume of personal loans in the UAE increased to Dhs349.9 billion in February 2017, according to a UAE Central Bank report issued on Tuesday, which affirmed the banks' continual...
Dubai economy continues to grow despite challenges
Source : Gulf Today  
Date : 2017-03-22
The Emirate of Dubai continues to show growing levels of buoyancy in different business sectors, boasting growing demand and increasing returns thanks to its highly sophisticated industrial base and rising...
Opec mulls oil cut extension
Source : Khaleej Times  
Date : 2017-03-22
Opec oil producers increasingly favour extending beyond June a pact on reducing crude supply to balance the market, sources within the group said, although Russia and other non-members need to...
'Endowment is a tool for developing communities'
Source : Gulf Today  
Date : 2017-03-22
His Highness Sheikh Mohammed Bin Rashid Al Maktoum, Vice President and Prime Minister of UAE and Ruler of Dubai, emphasised that endowment is a developmental tool for communities and an...
Shurooq, Emaar, Eagle launch Dhs2.47b projects
Source : Gulf Today  
Date : 2017-03-22
Sharjah-based Omran Properties is to launch three real-estate projects in the emirate worth Dhs2.47 billion. The unprecedented developments, the first Omran have made in Sharjah, bring new residential, retail, commercial...
VP launches new beachfront resort
Source : Gulf Today  
Date : 2017-03-22
His Highness Sheikh Mohammed Bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai, on Tuesday launched a new beachfront entertainment destination located at...
Dubai realty to attract Chinese investments
Source : Gulf Today  
Date : 2017-03-22
Dubai developers are all geared to showcase the best of Dubai real estate opportunities to the Chinese investors at the upcoming Dubai Property Show that will be held in Shanghai,...
Pak investors pump Dhs4.4b in Dubai properties
Source : Gulf Today  
Date : 2017-03-22
Pakistani investors have pumped in Dhs4.4 billion worth of investment in Dubai’s property market in 2016 and are among the top 3 investors, according to Dubai Land Department....
MoF organises workshop on tax awareness for businesses
Source : Gulf Today  
Date : 2017-03-22
The UAE Ministry of Finance (MoF) has launched the first phase of its awareness and education workshops that will prepare businesses for the new tax system that will be introduced...
MoE unveils app to strengthen country's foreign trade, economic relations
Source : Gulf Today  
Date : 2017-03-22
The Ministry of Economy launched an interactive and smart online application to strengthen the UAE's economic and foreign trade relations with countries across the world....
Jafza organises American Business Forum
Source : Gulf Today  
Date : 2017-03-22
Jebel Ali Free Zone (Jafza), a DP World Company and the UAE's flagship trade and logistics hub for the Middle East region and Africa, has organised a business forum for...
Oman to use AIM platform to forge new trade, investment ties
Source : Gulf Today  
Date : 2017-03-22
Ithraa, Oman's inward investment and export promotion agency, is geared up to take advantage of the ambitious three-day annual investment conference and exhibition to be held in Dubai to spur...
Dubai starts desert solar plant as part of world's biggest park
Source : Times of Oman  
Date : 2017-03-22
Dubai's government-owned utility completed a 200-megawatt power plant one month ahead of schedule as part of a plan to build the world's largest solar energy park by 2030....
Kuwait to showcase at Dubai ATM multi-billion dollar 'tourism' plan
Source : Arab Times  
Date : 2017-03-22
With ambitions to welcome 440,000 visitors a year by 2024, the government of Kuwait is pressing ahead with multiple plans that will see billions of dollars invested in projects and...
QGIRCO eyes expansion
Source : The Peninsula  
Date : 2017-03-22
Qatar General Insurance and Reinsurance Company (QGIRCO) is planning to further expand its presence in insurance sector with focus on the real estate projects....
CI affirms QNB ratings on par with Qatar's with a stable outlook
Source : Gulf Times  
Date : 2017-03-22
Capital Intelligence (CI), a global credit rating agency, yesterday affirmed QNB's long and short-term foreign currency ratings (FCRs) at 'AA-' and 'A1+' respectively, at the same level as the sovereign...
UAE is new hub for entrepreneurs says report
Source : TradeArabia  
Date : 2017-03-22
The United Arab Emirates (UAE) is emerging as a new hub for entrepreneurs and startups, according to a report....
Total 552 Results in 28 Pages
1 
For more news, views and reports about this topic, please subscribe
to GRC website: www.grc.net
Thu Mar 23, 2017| 24-جماد ثاني-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
  Op-Ed
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
UAE'S NON-OIL TRADE HITS DHS1.2 TRILLION
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
Challenges to Education in the GCC during the 21st Century
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
    GRC Newsletters/Bulletins

Enter your email to get the Newsletter
Go
GRC Publication
      
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