Bahrain projects further growth

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Bahrain has seen several major investments by local and overseas banks this year. (Getty Images)

Bahrain claims its financial sector is still on a roll following recent big investments.

Bahrain's banking sector remains buoyant, according to the country's Economic Development Board. The first quarter of 2008 has seen the announcement of a series of ventures involving international banks in the Kingdom.

A new report by the Securities and Investment Company predicts 20% growth per year in the financial sector for at least the next three years.

"We are delighted with the surge of recent activity in our banking sector," said Shaikh Mohammed bin Essa Al-Khalifa, chief executive of the Economic Development Board (EDB) of Bahrain.

"The relocation of many high profile international banks to the Kingdom is testament to our continued support and liaison with the private sector and commitment to creating the most well regulated business-friendly environment.

In April this year, one of Bahrain's leading financial service providers, Ahli United Bank (AUB) announced that it had signed a memorandum of understanding with the UK -based firm Legal and General Group, which will see it offering investment services and Sharia-compliant insurance. The partners will each have a 50% stake in the new venture, which will be headquartered in Bahrain and service the Gulf region.

Bank of Baroda, a leading Indian lender with global operations in 24 countries, commenced operations in Bahrain in March this year. The Bank targets high net worth individuals and corporations with its initial project to syndicate a $100 million loan for a Bahrain-based customer.

HDFC Bank, reportedly India's second largest non-governmental bank, has also been awarded a license by the Central Bank of Bahrain to establish a wholesale banking branch, the first such HDFC foreign venture.

In February 2008, Gulf Finance House, an Islamic wholesale bank based in Bahrain, announced it would start a Shariah compliant investment bank dedicated to the energy sector. The bank will be capitalised at US $750 million.

The banking industry is the largest employer in Bahrain's financial sector and the Central Bank of Bahrain's recent employment survey showed that the workforce expanded by 20.6% year on year in 2007 to support this rapid growth.

"The boom in Bahrain's banking sector is evidence of the hard work of the professionals working in the sector, particularly our skilled Bahraini professionals," said EDB's Shaikh Mohammed.

"The EDB facilitates the establishment of business in Bahrain, and we will continue to encourage overseas banks to consider Bahrain's many advantages during their decision making process when locating operations to the Middle East.

"We fully expect 2008 to be our best year yet in the banking sector as Bahrain continues with its rapid economic growth and surging development in banking and finance, maintaining our position as the region's leading financial centre."

EDB is also expecting National Bank of Abu Dhabi to move ahead with a branch opening in Bahrain as part of a global expansion plan.

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