Bahrain bank lending rises 5.3% to $32.3bln

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Bahrain’s outstanding loans and credit facilities to residential sectors rose 5.3 per cent to BD12.1 billion ($32.3bn) at the end of April 2024 compared with the end of 2023, the Central Bank of Bahrain said yesterday.

A statement issued after the banking and financial sector regulator’s third board of directors meeting for the year 2024 highlighted that the business sector accounted for 43.6pc of the total, with the personal sector making up 48.2pc, according to the data.

Separately, the total balance sheet of the banking system, which includes retail and wholesale banks, rose 10.7pc to $239.3bn at the end of April 2024 compared with the same period a year earlier.

A rise in bank lending can signal either growing business confidence and investment or higher consumer spending on big-ticket items, both potentially indicating a healthy economy with rising wages.

The meeting saw the board chaired by Hassan Al Jalahma reviewing developments in the financial sector for the second quarter of 2024 and CBB’s financial performance report as end of May 2024, noting a stable money supply of BD16bn ($59.8bn) at end-April compared with the prior year.

Retail bank deposits grew modestly, with total private deposits reaching BD13.9bn at end-April 2024, a 0.4pc increase year-on-year. Point-of-sale (POS) transactions showed stronger growth, rising 20.1pc year-on-year to 16.7m in April, with contactless payments accounting for 77pc. The total value of POS transactions also climbed 12.3pc year-on-year to BD365.1 million, with contactless transactions representing 53.4pc.

The banking sector remained well-capitalised, with the capital adequacy ratio rising to 21.8pc in the first quarter of 2024 compared to 19.2pc a year earlier. Capital adequacy ratios varied across sectors, ranging from 32.7pc for conventional retail banks to 18.2pc for conventional wholesale banks. Islamic banks also showed healthy ratios, with 24.2pc for retail and 22pc for wholesale segments.

The number of registered collective investment undertakings (CIUs) declined slightly, with 1,702 registered as of April 2024, a 3.35pc decrease year-on-year. However, the total net asset value (NAV) of CIUs increased 1.57pc to $11.932bn in the first quarter of 2024 compared with the same period in 2023.

This growth was driven by a 14.78pc increase in the NAV of overseas domiciled CIUs, offsetting a 14.25pc decline in the NAV of Bahrain-domiciled CIUs. Notably, the NAV of Sharia-compliant CIUs grew significantly, rising 47.6pc year-on-year to $1.783bn in the first quarter.

Welcoming the newly appointed board members, the chairman wished them success and prosperity in carrying out their entrusted responsibilities.

During the meeting, the CBB Governor Khalid Humaidan also presented the CBB priorities for the coming period to the board members, focusing on digitalisation, growth of the financial sector and maintaining its stability, elevating the ecosystem and performance of the key supporting stakeholders in the financial sector.