Bahrain's banks learn hard lessons

The aftershocks of the scandal embroiling the Al Gosaibi and Saad groups continue to ripple across the Gulf.

With the troubled Saudi conglomerates owing an estimated US$3 billion (Dh11.01bn) in the UAE and another $5bn to banks in Saudi Arabia. But the affair is having particularly strong repercussions in neighbouring Bahrain.

The Central Bank of Bahrain (CBB) was forced in July to take control of Awal Bank, owned by the Saad Group, and The International Banking Corporation (TIBC), a unit of Ahmad Hamad Al Gosaibi and Brothers (AHGB), after it became clear that neither bank could meet its loan obligations.