The past few years of lower global oil prices have had a big impact on Bahrain’s economy, cutting into state revenue and requiring a major effort to rein in public spending. In fact, the impact has been more apparent than in many of the country’s Gulf Co-operation Council (GCC) neighbours, given Bahrain’s higher break-even point for oil per barrel. Despite this, the country’s banking sector has remained relatively stable, with good liquidity and overall lending growth.
“There is no specific risk for the Bahrain banking sector as such, other than the general issues associated with the slowdown of growth in the region and globally,” says Khalid Hamad, executive director for banking supervision at the Central Bank of Bahrain. “The banking sector adequately and successfully implemented International Financial Reporting Standard 9 in 2018, which resulted in providing for more credit risk provisions by banks.”
