Bahrain’s financial system remains resilient, liquid and strong despite the recent unrest, leading bankers said as they expressed relief that the February 14 anniversary of last year’s protest passed without major disruptions.
‘I was watching the situation from the UAE and we kept a close eye on outflows and was surprised just how minimal they were,’ said Standard Chartered Bank Bahrain chief executive Hassan Jarrar at a meeting with reporters. ‘We thought there would be an outflow of capital but the needle did not move.
‘This is a reflection of where Bahrain stands in the Middle East. It has the best regulatory system in the region and an amazing level of unspoken confidence and we need to remind people of its success.
‘The rest of the region and further afield can learn from how Bahrain’s financial system stood up to its problem. People should give Bahrain some credit. It has a 100 years of banking history and that has not changed. The black clouds will go away. Bahrain may be less flash than some places – but it has more substance,’ he said.
The meeting was organised by the Bahrain Association of Banks (BAB).
Abdulkarim Bucheery, chief executive officer of National Bank of Bahrain and BAB chairman, said: ‘Thank God February 14 went fine to a great extent. There is hope that the political situation will be seen as stabilised to a great extent and agencies start increasing ratings.’
‘The situation in Bahrain is much better than people expected,’ he said. ‘A couple of banks left but only one of them was connected to unrest. There was no flight of capital or jobs.
‘A lot of people expected institutions would leave and staff would be cut but none of this happened.’ He said two Indian banks had applied for licences to open branches in the island state.
He also said a government move to stop on-arrival visas for some Western nationalities would not affect banking.
‘The government still needs to push infrastructure projects. There is no liquidity problem on the bank side but the issue is scarcity of projects,’ Bucheery said, adding the sector felt relief that the economy had not suffered greater damage.
Bankers welcomed the appointment of Kamal Ahmed last week to the transport ministry portfolio. Ahmed was previously chief operating officer at the Economic Development Board and is seen by many as the kind of technocrat needed in government.
Ahmed’s ministry is expected to supervise a Saudi Bahrain rail project which will be funded by the two governments and private investors, as well as restructuring of Bahrain’s aviation sector, including carrier Gulf Air.
‘Kamal Ahmed comes from a business background and I think the focus for Bahrain is building the railway to Saudi Arabia. Having a minister for transportation is the right thing to do for the economy and the country,’ Ali Moosa, managing director of JP Morgan in Manama, told Reuters.