IslamicFinance.de

The global financial crisis as well as the political unease over the last few years have led to weaker performances in Bahrain's banking sector, particularly wholesale banks. Along with banks in other markets, Bahrain-based banks have de-risked their balance sheets, concentrating on more stable sources of funding and reducing their exposure to riskier sectors. Besides, there have been a number of bank mergers in Bahrain recently. However, Bahrain has a more limited shock- absorption capacity compared to other GCC countries, like a budget highly sensitive to oil prices, a weak non-oil revenue base and modest fiscal reserves. Moreover, the political situation remains uneasy. As with other GCC institutions, the stronger Bahrain-based banks are widening their reach in other markets.