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Bahrain emerges as diversified financial center

MANAMA: Over the years, Bahrain has emerged as a highly diversified financial center in the world with a mix of retail and wholesale banks, asset management firms and insurance companies, a Bahraini government minister said on Tuesday.

"Bahrain is host to both conventional and Islamic firms in each of these categories and has become one of the world's primary locations for Islamic finance," Bahrain's Finance Minister Sheikh Ahmed bin Mohammed Al-Khalifa said on Tuesday.

"Bahrain is also home to the largest concentration of Islamic banks in the world - currently they number 27 - as well as many Islamic insurance and fund management businesses," he said.

In his speech during the opening session of the Bahrain/Bermuda Seminar on "Global Financial and Insurance Services" held at the Ritz-Carlton Hotel, Sheikh Ahmed said that the economies of Bahrain and Bermuda have many similarities.

"In both cases firms based in our countries provide a broad range of financial services for clients who are based in other jurisdictions," he said.

In Bahrain's case, Sheikh Ahmed said, these clients come from throughout the wider Middle East and North Africa region, including the six members of the Gulf Cooperation Council and in consequence, like Bermuda, the combined assets of our financial industry amount to many multiples of the size of our economy.

"Bahrain has been best known as a banking center, including as the base for the wholesale banks that provide project finance throughout the wider MENA region," he said.

"Bahrain's future development strategy, outlined in our Vision 2030 Plan, involves continuing to encourage a vibrant and diverse financial sector, with asset management and insurance at its core.

"As of May 2010 there were 2,743 authorized funds established in Bahrain managing assets of almost $10 billion. There were also 169 insurance companies and organizations authorized in Bahrain. Since 2001 gross premiums have increased at an annual average rate of 18 percent, and employment in the sector continues to expand. The growth of employment in the insurance sector by over 10 percent in 2009 helped to ensure that overall employment in the financial sector grew by 1.5 percent, contrary to the trends in most financial sectors around the world. The continued growth in insurance sector employment is testament to a pool of skilled and knowledgeable employees in Bahrain as the result of training initiatives of bodies like the Bahrain Institute of Banking and Finance," he said.

"The growth of the insurance sector in Bahrain has been underpinned by strong regulatory foundations. Since 2005 the Central Bank of Bahrain, the single financial regulator for Bahrain's entire financial services sector, has implemented a completely new regulatory framework for insurance. The insurance sector's premium posted an 18 percent growth in 2009, showing a strong growth patterns," he said.

By Mahmood Rafique

© Arab News 2010