Marcopolis presents the Bahrain Report focused on the investments, doing business, economy and other topics featuring interviews with key executives and government officials. The sectors under review are industry, telecom, banking sector, ICT, investments and more.
Developed in conjunction with Ext-Joom.com
The banking sector has seen some consolidation in recent months, most notably among Islamic banks. Ithmaar Bank last year announced its merger with First Leasing Bank, in January of this year there was an announcement of the 3-way merger between Elaf Bank, Capital Management House and CAPIVEST to create an international bank with assets in excess of US $400 million, and the national bank of Bahrain and GOSI took over 52% of the Bahrain Islamic Bank.
Jamal Ali Al-Hazeem, CEO of BMI Bank, believes "The market is over-banked and saturated with lots of small entities. The sooner we get those consolidated, amalgamated or merged into a larger entity, the better it is for the market and for the industry."
Besides Al-Hazeem sees more growth coming up coming up in the banking sector on the backdrop of governmental spending. In the CEO's words, "Secondly, Bahrain is just like the rest of the Gulf state countries. The main economy is driven by the government and the faster the government can introduce a project, the faster we can see growth or activities in the market. A lot of the companies, especially the SMEs, are dependent on government projects that are launched and sponsored by the government. With the Marshall Program that has been endorsed and committed by the other GCC countries, I think we have US $1 billion to spend on projects every year."
Hopeful for stability, Al-Hazeem's growth rate forecast for the banking sector is between 3% to 6% for 2013-2014. "Hopefully with stability, the 2.5, 2.6 or 3% will translate to 5 and 6%. You may see that in the latter part of this year and I hope we will see it in 2014."