National Bank of Bahrain (NBB), the second-largest bank in terms of market capitalisation on the Bahraini bourse, reported a rise in Q3 earnings after markets closed on Wednesday.

In a statement to the exchange, the bank said that it had “delivered strong financial results and continued growth for the first nine months of 2018”. The bank also noted that the strengthened results “were supported by more prudent asset liabilities management”.

For the first nine months of 2018, the bank reported an 11.3 percent rise in net profit, which reached 55.0 million Bahraini dinars ($146.3 million), compared to 49.4 million dinars for the same period last year.

The bank recorded a 2.8 percent increase in third quarter (Q3) net profit to 18.2 million dinars this year, from 17.7 million dinars last year.

For the third quarter of 2018, operating profit rose by 9.6 percent to 19.5 million dinars, compared with 17.8 million dinars in the third quarter of 2017.

On Thursday, NBB’s stock price gained 3.36 percent as the rise in Q3 earnings boosted the bank’s shares. For the year, NBB has added 4.88 percent so far in 2018.

Shares of the banking index in Bahrain have dropped 1.59 percent so far this year, according to data from Eikon, as the country has been struggling with fiscal and current account deficits partly caused by low oil prices (Read more).

Ratings agency S&P Global said in its banking industry country risk assessment (BICRA) report on Bahrain released on Thursday that “adequate banking regulation and supervision in Bahrain supports domestic banks”.

The report also added that the overbanked status of the Bahraini banking sector along with the small bankable population and economy “fosters intense competition and squeezes interest margins.”

The BICRA methodology is designed to evaluate and compare global banking systems.
A BICRA is scored on a scale from 1 to 10. Groups that score 1, have the lowest-risk banking systems, while those who score 10 have the highest-risk.

S&P Global rating agency classified the Bahraini banking sector at (B+/Stable/B) in group 7.

Other countries in group '7' include Croatia, Indonesia, Morocco, and Romania. Of Bahrain's peers in the Gulf Cooperation Council (GCC), Oman is in group '6', Qatar and the UAE are in group '5', and Kuwait and Saudi Arabia are in group '4', according to the report.

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The Bahraini stock market closed 0.78 percent higher on Thursday and is now 0.62 percent lower than the start of the year.

Elsewhere in the region, Dubai’s index added 0.44 percent on Thursday, while Abu Dhabi’s index gained 0.37 percent, Kuwait’s index dropped 0.15 percent, Bahrain’s index gained 0.78 percent and Oman’s index edged 0.19 percent lower.

By 14:09 GST, Saudi’s index was trading 0.17 percent up, Qatar’s stock market index was mainly flat and Egypt’s main market index was 0.63 percent lower.

(Reporting by Gerard Aoun; Editing by Michael Fahy)

(Gerard.aoun@refinitiv.com)

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