Manama: Growing demand for more sophisticated financial products and services helped drive growth in Bahrain’s financial sector during 2013, according to the Bahrain Economic Development Board (EDB) and Central Bank of Bahrain (CBB). The trend is expected to continue into 2014.
Bahrain attracted a number of businesses, with the number of registered financial services firms swelling to 415 by the end of the year, making it one of the largest financial centres in the region, EDB said.
“The demand from Gulf market boosts Bahrain’s financial sector and with ongoing investment in infrastructure and an expanding population, demand for financial services is growing,” said Kamal Bin Ahmad, Minister of Transportation and Acting Chief Executive, Bahrain EDB.
“Bahrain offers a highly-skilled bilingual workforce, a tried and tested regulatory framework, low operating costs and excellent connectivity across the region, with particularly strong access to the region’s largest economy, Saudi Arabia. This makes Bahrain an ideal location for financial firms that want to establish a sizeable long-term presence in the GCC and take advantage of these trends. We have seen a number of these firms establishing offices in Bahrain in 2013 and we are confident that this will carry on into 2014 as demand grows and we continue to implement reforms that will enhance our role as a regional financial hub,” he said.
A number of reforms
Alongside growth in 2013, Bahrain also developed a number of reforms to ensure that the regulatory framework continues to meet the sector’s needs and encourage long-term growth.
The CBB, the Kingdom’s sole regulator, has brought in new directives on banking remunerations and fees, updated directives on banks’ internal audit function in line with new Basel requirements.
It issued new rules that meant that all applications that are prepared in accordance with the Unified Standards issued by the Gulf Cooperation Council by Gulf issuers will be accepted in Bahrain, easing the integration of GCC securities markets.
The CBB also recently implemented new rules set to boost the takaful sector by addressing some issues around solvency, which have had the potential to hold back the rapidly expanding industry. The takaful industry in Bahrain has experienced a remarkable growth in the last ten years – the industry grew by almost 22 per cent in 2012 — and by continuing to evolve the takaful model, the Kingdom will remain a leading jurisdiction for the sector.
“High quality regulatory standards lie at the heart of a successful financial sector and this is why Bahrain is determined to work at adapting and maintaining our framework in line with international standards,” said Rasheed Al Maraj, Governor, CBB. “The Islamic Finance sector is also particularly important to Bahrain, so the CBB’s leadership in the development of Islamic finance will be maintained and enhanced through developing new initiatives and maintain an ongoing dialogue within the industry.”
Education and human capital initiatives were also a major focus in 2013, and the CBB worked closely with a range of organisations including the Bahrain-based Waqf Fund and the Bahrain Institute of Banking and Finance (BIBF).
The Waqf Fund put in place its plan for a leadership training initiative being launched in 2014, to help develop the next generation of leaders in the Islamic Finance sector, whilst BIBF’s Centre for Islamic Finance continued to expand its international footprint, and in July 2013 arranged a training event for 29 participants from 16 different countries.
