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During the first six months of last year, $ 19bn of liabilities - which includes deposits - were withdrawn from Bahrain's financial system, representing 12 per cent of sector-wide liabilities, according to Moody's.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.
 
Fixed telephone lines now at over 381,000
Source : Oman Daily Observer  
Date : 2015-03-30
Subscribers of fixed phone service in the Sultanate stood at more than 381,000 in February....
Gene bank sought for olibanum trees
Source : Oman Daily Observer  
Date : 2015-03-30
A report on frankincense suggests to have a pilot olibanum farm in western Raysut, or near Thumrait or in the Sadah-Hasik area so that treated water can be used to...
Exhibition on genetic resources in Buraimi
Source : Oman Daily Observer  
Date : 2015-03-30
The national awareness campaign, supervised by Oman Animal and Plant Genetics Resources Center, was inaugurated on Sunday under the auspices of Khalaf al Eshaqi, Wali of Al Buraimi. It received...
PASI gives nod for last year's final accounts
Source : Oman Daily Observer  
Date : 2015-03-30
Shaikh Abdullah bin Nasser al Bakri, Minister of Manpower, Chairman of the Board of Directors of the Public Authority for Social Insurance (PASI) on Sunday headed the first meeting of...
Gulf customer services forum begins
Source : Oman Daily Observer  
Date : 2015-03-30
The First Gulf Customer Services Forum, hosted by the Sultanate and represented by the Public Authority for Electricity and Water (PAEW), on Sunday started at Golden Tulip Hotel under the...
National carrier Oman Air connects with Singapore's Changi airport
Source : Oman Daily Observer  
Date : 2015-03-30
Airbus A 330, flight WY821 of Oman Air landed at Changi International Airport on Sunday evening marking the official launching of the company's flights to Singapore, which is the 48th...
Pact signed to lay roads in Sultanate
Source : Oman Daily Observer  
Date : 2015-03-30
The Ministry of Regional Municipalities, Environment and Water Resources (MRMEWR) on Sunday signed a number of agreements worth of RO 100,411,567 paving the way for several internal roads to be...
Dubai set for next cycle of growth: 5 sectors will drive economy
Source : Emirates 24/7  
Date : 2015-03-30
Backed by five major sectors, Dubai is set for steady growth this year and the next as the emirate is heading for a next growth cycle with the PPP model...
QDB launches 'Isteshara' for SMEs
Source : The Peninsula  
Date : 2015-03-30
Qatar Development Bank (QDB) has launched an integrated consultancy programme ‘Isteshara’ to provide different types of advisory services to small and medium-sized enterprises (SMEs)....
New housing plan for needy women
Source : Gulf Daily News  
Date : 2015-03-30
Single Bahraini women, divorcees, widows and abandoned wives could soon be eligible for government homes, after the Shura Council yesterday approved amendments to 40-year-old legislation governing social housing services....
BD6 million Muharraq market plan may be shelved
Source : Gulf Daily News  
Date : 2015-03-30
A contract to build a new BD6 million central market in Muharraq could be deemed null and void after Works, Municipalities and Urban Planning Affairs Minister Essam Khalaf referred it...
Airport is ready to handle F1 equipment
Source : Gulf Daily News  
Date : 2015-03-30
Hundreds of tonnes of equipment is expected to arrive at Bahrain International Airport over the coming weeks ahead of this year's Formula One....
Alarm is raised over fish stocks
Source : Gulf Daily News  
Date : 2015-03-30
Bahrain's fish stocks could be wiped out within three years unless urgent action is taken, an expert has told the GDN....
Credit Suisse upgrades UAE stocks
Source : Khaleej Times  
Date : 2015-03-30
Credit Suisse said on Sunday that it is upgrading the UAE stock markets to overweight from neutral, citing the recent sell-off as “unjustified” while valuations are now at attractive discount...
ictQATAR, QM sign 3D digitisation MoU
Source : The Peninsula  
Date : 2015-03-30
The Ministry of Information and Communications Technology (ictQATAR) and Qatar Museums yesterday signed a memorandum of understanding (MoU) for digitising 3D materials, with QM becoming the 3D Conversion Centre for...
Qatar Steel attends career fair
Source : The Peninsula  
Date : 2015-03-30
To provide academic guidance and help high school students choose the right career paths, Qatar Steel recently participated as an official sponsor in 4th Annual Career Fair for Universities &...
Qatar bourse plans rights issue trading
Source : The Peninsula  
Date : 2015-03-30
Qatar Exchange (QE) has announced its plans to allow investors to trade rights to share issues, which would let them profit from capital increases even without subscribing to them....
Milaha celebrates arrival of first Qatar-India container vessel
Source : The Peninsula  
Date : 2015-03-30
Milaha celebrated the arrival of MS Convent, the first direct container vessel that completed its maiden voyage from Nhava Sheva port in Mumbai in India to Doha...
Ooredoo AGM okays 40pc cash dividend
Source : The Peninsula  
Date : 2015-03-30
The Annual General Meeting of Ooredoo yesterday approved the recommendation of the Board of Directors to distribute a cash dividend of 40 percent of the nominal share value (QR4 per...
Zain KSA continues to offer free unlimited on-net calls
Source : Saudi Gazette  
Date : 2015-03-30
DUE to great demand, Zain KSA continued its offer for all new and existing customers which enable them to enjoy unlimited calls from Zain to Zain for free....
Total 1914 Results in 96 Pages
1 
For more news, views and reports about this topic, please subscribe
to GRC website: www.grc.net
Mon Mar 30, 2015| 09-جماد ثاني-1436هـ
Houthis should lay down arms, halt coup - GCC chief
Saudi banks post SR7 billion net profits in two months
Kuwaiti Panel: No entry to blasphemers
Qatar's GDP Estimated at QR 194.40 Billion
'Dangerous accord' with Iran worse than Israel feared: PM
Falling oil prices threaten mega projects worldwide: KPC
Arab leaders agree joint military force
Foreign assets rise to RO 6.471 bn in Oman
Syrian forces regroup after militants seize Idlib city
Dubai inspires world's tallest hotel in Switzerland
Bahrain's security top priority says Premier
Credit Suisse upgrades UAE stocks
Operation 'Decisive Storm' will help boost GCC security: UAE
Arabs back UAE on islands issue
Officials: Iran nuclear talks solving some issues, not others
Oman plans Opex show in Jeddah 
    Newspaper Editorials
National priorities
Airline passenger safety is paramount and non-negotiable
More>>  
    Opinions
Egypt summit: Beginning of a new era
Iran's allies are the Houthis' allies
More>>  
    GCC Press Agencies
Day's main stories from the GCC Press Agencies
    Reports
Iranian Nuclear Program Negotiations : What Next?
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
Evaluating Financial Literacy Training for Migrant Workers in the Gulf
The Socio-Political Background and Stakes of ‘Saudizing’ the Workforce in Saudi Arabia: the Nitaqat Policy
Current Progress in the Nationalisation Programmes in Saudi Arabia
    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:1  |   24-- 25 Middle Page :0  --   | Right : 24 - 24--en--sess-enreq-en-coming