Troubled banks swing spotlight on to Bahrain

When Saad Group, a troubled Saudi company, blamed its woes on a liquidity squeeze and singled out recent events affecting the Bahraini banking sector, it met with a furious response from the kingdom’s regulator.

In a rapid turnround the conglomerate, owned by Maan al-Sanea, issued a fresh statement the next day that lavished praise on the central bank, saying its “prudent oversight reflects the commitment to firm governance in Bahrain”.

The troubles of Mr Sanea, who has had his personal accounts frozen in Saudi Arabia, as well as those of Algosaibi group, another Saudi conglomerate, have rattled bankers and investors across the Gulf. It has also swung the spotlight on to Bahrain (pictured above), which claims to have the Gulf’s oldest and best regulated financial centre and has long been an offshore base for banks doing business in Saudi Arabia.