Bahrain says no systemic risk from Saudi groups - TV

The impact of two Bahrain-based banks owned by troubled Saudi groups on the Bahraini banking system is limited and there is no systemic risk, the central bank's governor told Al Arabiya television on Thursday.

Bahrain's central bank last week assumed control of Saad Group's Awal Bank and The International Banking Corporation (TIBC), owned by Ahmad Hamad Algosaibi & Bros, citing a substantial shortfall in their assets compared with their liabilities.

"I want to make clear ... that the damages resulting from these two banks are very limited and there is not systemic risk on the banking sector in Bahrain," Rasheed Al Maraj told the Saudi-owned television station.

"The circumstances that led to the situation of these two banks are relevant to the groups that own these two banks," he said.

Both groups ran into financial difficulties in May, throwing into uncertainty billions of debt owed to a large number of regional and international banks.

"It became clear to us through the investigation we carried out during the past two months that there was a decline in the value of assets at the two banks compared to what is in the books, especially in terms of the loans and investment portfolios," Maraj said. (Reuters)

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