The loans portfolio in Bahrain’s banking system surged to BD10.9 billion (approximately $29bn) as of end-January 2022, signalling the return of activity across all economic sectors in the country.

Reviewing figures during the regulator’s first board meeting this year, chairman Hassan Al Jalahma said total loans and credit facilities provided to resident economic sectors increased 3.8 per cent from January 2021, with the business sector accounting for 48.6pc of the total.

He said that key economic, monetary and banking indicators are consistent with the return of activity in all sectors in the kingdom, and demonstrate the financial sector’s stability and capacity to serve the national economy.

In fact, recent months data showed stable liquidity, whereby money supply in its broad sense, M3 (M2 + government deposits) totalled BD14.9bn as of end-January 2022, an increase of 6.4pc from the level as of end-January 2021.

According to experts, an increase in the supply of money typically lowers interest rates, which in turn, generates more investment and puts more money in the hands of consumers, thereby stimulating spending.

As for retail banks, total private deposits increased to BD12.9bn at the end of January 2022, an increase of 5.6pc compared to end-January 2021.

The number of point of sale (POS) transactions during the fourth quarter of 2021 (October–December) jumped 51.5pc year-on-year to 38m (70.7pc of them contactless), whereas the total value of POS transactions during the period went up 41.9pc to BD974m (44pc of them contactless).

The banking sector maintained a high level of capital adequacy, with the ratio measured at 18.6pc in the fourth quarter of 2021 compared with 18.3pc in the third quarter of 2021.

The CBB requires all banks to maintain a minimum capital adequacy ratio of 12.5pc, and during the quarter the ratio for conventional retail banks was 20.6pc, whereas it was 17.1pc for conventional wholesale banks, 21.2pc for Islamic retail banks, and 15.8pc for Islamic wholesale banks.

The board approved the CBB’s annual report and audited financial statements for the year 2021, and also reviewed the CBB’s performance report and developments in the financial sector for the first quarter of 2022 and the financial performance report as of end-February 2022.

The chairman and members of the board expressed their appreciation for the kingdom’s leadership for the measures taken to contain the repercussions of Covid-19, including the Economic Recovery Plan which contributed to the return of normal activities to all sectors of the economy.

The directors also welcomed the efforts of the banking sector over the past year in terms of providing support and assistance to reduce debt burdens on individuals and companies.

 

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