Bahrain names administrators for Awal Bank, TIBC

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ADMINISTRATORS NAMED: Bahrain's central bank names two law firms to oversee units of troubled Saudi firms Saad and Algosaibi. (Getty Images)

Bahrain’s central bank on Sunday appointed two law firms as administrators for Awal Bank BSC and The International Banking Corp. BSC as the Bahrain-based lenders face lawsuits after defaulting on loans.

Charles Russell LLP will act as administrator of Awal Bank, owned by Saudi Arabia’s Saad Group, and Trowers & Hamlins will be the administrator for TIBC, owned by Saudi Arabia-based Ahmad Hamad Algosaibi & Brothers Co., the Manama-based central bank said in an e-mailed statement to news agency Bloomberg.

The central bank ''has judged that the appointment of a law firm to lead the administration is both appropriate and cost effective given the number of legal cases'' the two banks face, the statement said. A leading accountancy firm will also work with the administrators to ''ensure that the interests of creditors are upheld,'' it added.

The central bank took control of the two banks on July 30.

At the time it also announced that it is taking action to limit the real estate exposure of local banks.

The new regulations put the maximum share of real estate financing that Bahrain's banks can hold in their gross financing portfolios at 30 percent.

Bahraini retail banks in June had 26.9 percent of their outstanding loans in the construction and retail sector, their largest concentration in any one sector. Meanwhile, 5.9 percent of loans were personal loans secured by property mortgages, according to central bank data.

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