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During the first six months of last year, $ 19bn of liabilities - which includes deposits - were withdrawn from Bahrain's financial system, representing 12 per cent of sector-wide liabilities, according to Moody's.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.
 
Oman ranks second in happiness index in GCC
Source : Times of Oman  
Date : 2015-04-25
Faring well in the global ranking of the happiest nation, Oman is ranked 22 out of 158 countries on the index....
Qatar remains one of the richest countries
Source : The Peninsula  
Date : 2015-04-25
Qatar continues to be one of the wealthiest countries in the world with a per capita income that was estimated at over US$101,000 in 2013....
Why is Rouhani coddling the military?
Source : Asharq Al-Awsat  
Date : 2015-04-25
Even before they seized power in Tehran, Khomeini's followers were known for their expertise in massaging the truth to suit their political aims....
Bid to legalise 'free visa' labour
Source : Gulf Daily News  
Date : 2015-04-25
A study is being carried out to assess the feasibility of legalising the status of tens of thousands of foreign nationals working illegally in Bahrain....
Only Saudis should drive taxis
Source : Saudi Gazette  
Date : 2015-04-25
I stayed in Riyadh for a few days during the book fair that was held there. I used taxis to get around. I noticed that expatriates monopolize this sector under...
Saudi Arabia's answer to global oil glut: Pump more crude
Source : Times of Oman  
Date : 2015-04-25
Saudi Arabia has a response to the global surplus of oil: Raise output to near-record levels and then pump even more....
Oman's Ministry of Housing aims to check real estate price fluctuations
Source : Times of Oman  
Date : 2015-04-25
To end the fluctuations in the real estate prices caused by the unlicenced brokers, the Ministry of Housing plans to strictly enforce the existing regulations, according to an announcement issued...
Internet use, speed to rise by year-end
Source : The Peninsula  
Date : 2015-04-25
Qatar expects a significant increase in Internet penetration once the fibre optic broadband network is completed by the end of the year....
India building fertilizer factory in Chabahar
Source : Islamic Republic News Agency  
Date : 2015-04-25
Indian Minister of Chemicals and Fertilizers Ananth Kumar said on Friday that the country has made up its mind to set up urea fertilizer factory in Chabahar to meet its...
UAE key market for EuroItalia
Source : Khaleej Times  
Date : 2015-04-25
Versace, the Italian perfume brand produced by EuroItalia, has opened its first shop-in-shop in the world in Paris Gallery’s showroom in The Dubai Mall and announced to open one shop...
Emirates SkyCargo expands in US with Orlando service
Source : Khaleej Times  
Date : 2015-04-25
Emirates SkyCargo, the freight division of Emirates, is set to expand its United States cargo network to 11 destinations, when the airline launches a daily service to Orlando, Florida, from...
Dubai, Czech total non-oil trade at Dhs3.7b
Source : Gulf Today  
Date : 2015-04-25
In 2014, total non-oil trade between Dubai and the Czech Republic reached a value of Dhs3.7 billion. This is a 15 per cent increase on 2013, with Dhs3.3 billion, and...
Iran to set up 10 more tourism offices overseas
Source : Tehran Times  
Date : 2015-04-25
Iran will establish ten more tourism information offices in other countries besides the existing tourism information offices already operating overseas, the head of Iran's cultural heritage organization has announced....
Construction begins on Masdar City residences
Source : Khaleej Times  
Date : 2015-04-25
Masdar City, Abu Dhabi’s pioneering, sustainable city, announced construction has begun on a residential complex that advances the city’s aim to be a leading hub of innovation where people live,...
Jebel Ali Port stands out at Singapore expo
Source : Khaleej Times  
Date : 2015-04-25
Jebel Ali Port’s new container Terminal 3 has been a major attraction at the Singapore’s Maritime Week, with visitors to DP World stand including Singapore’s Minister of Transport Lui Tuck...
Al Fanoos Fair to be set up for SMEs
Source : Khaleej Times  
Date : 2015-04-25
The UAE Ministry of Economy is organising the Al Fanoos Fair at Al Mushrif Mall between May 1 to 12 to provide small- and medium-sized enterprises, or SMEs, with a...
KFC surprises beachgoers with helicopter delivery service
Source : Khaleej Times  
Date : 2015-04-25
KFC surprised thousands of visitors to Dubai’s Kite Beach with its initiative ‘The taste that comes to you anywhere’, a spectacular and unexpected treat....
Spinneys community centre opens at The Villa in Dubailand
Source : Khaleej Times  
Date : 2015-04-25
Dubai Properties, a leading real estate developer, has announced the official opening of a Spinneys Community Centre at ‘The Villa,’ one of DP’s premier residential communities located in the Dubailand...
Bhima Jewellers opens its first store in Dubai with Nivin Pauly
Source : Khaleej Times  
Date : 2015-04-25
Bhima, the leading jewellery brand from India, inaugurated its first store in Karama Centre, Dubai. Film star Nivin Pauly inaugurated the store on April 18....
Industry leaders discuss future of Mideast banking
Source : Khaleej Times  
Date : 2015-04-25
Banking leaders and decision makers from across the GCC gathered in Dubai recently for The Future of Banking event, powered by Bloomberg Businessweek Middle East and in association with Dubai...
Total 1817 Results in 91 Pages
1 
For more news, views and reports about this topic, please subscribe
to GRC website: www.grc.net
Sun Apr 26, 2015| 07-رجب-1436هـ
'Stress test' will flush out desire for Syria peace: UN envoy
Oman's Ministry of Housing aims to check real estate price fluctuations
Ex-Yemen leader urges rebel allies to heed UN, pull back
Bank of Baroda, UAE Exchange launch flash money remittance service
Germany calls on Houthis to stop fighting
Qatar remains one of the richest countries
OIC chief calls for all-out fight against malaria
Iran to set up 10 more tourism offices overseas
IS ordered cops' killing
Bahrain king, Alwaleed discuss regional and economic issues
Diplomats vow to take Kuwait to a new height
Egypt inks MoUs with Kuwait's Alghanim International
Iran ships 'turn back' from Yemen: US
UAE key market for EuroItalia
Iraqi forces recapture Ramadi bridge from IS
Indian IT firms look to tap growing Oman market
    Newspaper Editorials
After Iran deal, world looks to jump-start nuclear disarmament
The Obama administration's response in this case smacks of the double standards it's always accused of.
More>>  
    Opinions
Why is Rouhani coddling the military?
Time to rebuild Yemen
More>>  
    GCC Press Agencies
Day's main stories from the GCC Press Agencies
    Reports
Prisons in Yemen
Hearing on U.S. Middle East Policy
More>>  
    Bank Reports
Saudi Arabia Banking Sector
GCC Equity Monitor - Global
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
Islamic Finance: A three-volumes series.
United Arab Emirates’ Legal Framework of Migration
Evaluating Financial Literacy Training for Migrant Workers in the Gulf
    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  |   55-- 55 Middle Page :0  --   | Right : 55 - 55--en--sess-enreq-en-coming