Much of Bahrain’s banking sector recovery hinges on the government’s plans to resume spending on infrastructure projects and consolidation among its fragile Islamic financial institutions, following a year of unrest that has dimmed the sector’s prospects.
Bahrain was once a financial hub in the Gulf, attracting international lenders such as BNP Paribas and Citigroup to the island state’s shores before the emergence of similar commercial centers in Doha and Dubai. It is home to 123 conventional banks with combined assets of around $200bn.
But after more than 12 months of political troubles, Bahraini bankers are putting a brave face on their sector’s growth prospects, pinning their hopes on a rebound in local infrastructure spending, such as the expansion of the domestic airport and the upgrade of its oil refineries.
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