Bahrain Banking & Financial Services Q4 2018
Despite its size, Bahrain has a well-developed and mature banking and finance sector. The market is supported bystringent regulations and an open business environment that is effective in attracting foreign investment and encouraging businessgrowth. Although the recent economic problems and the fall in oil prices have hindered the performance of most industries, thefinancial sector remains strong and is contributing to just under 20% of the country's GDP. Liquidity has improved in the bankingsector but a rise in funding costs is anticipated. The Islamic finance segment, in particular, has been improving and is leading theregion, with 24 Islamic banks holding assets valued at more than USD25.7bn. The stock market, on the other hand, is experiencingextremely slow growth and is an area that should be addressed, although it is still on the rise. The banking sector might seeconsolidations in the wake of competition from regional banks - within Bahrain itself and in regional markets that Bahrain strives toaccess. The shape of the banking industry and the presence of many small players could be the impetus for consolidation events asa response to rising competition.
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