Bahrain banks resilient: Moody’s

DT News Network

Manama 

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Non-performing loans (NPL) in Bahrain banks have witnessed modest uptick in first half of 2015, but the initiatives to recover such loans and the good growth in domestic-loan issuance is helping the banks to tide over the issue, Moody’s told DT News during the media -roundtable at Bahrain Bourse.

Christos Theofilou, AVP-Analyst, Moody’s said that the provisions for offsetting NPLs have been growing over years, which is a good trend. Even though, this provision, 75pc, is a tad lower than the GCC average of 90pc, the ratio has improved from 60pc in 2010.

The high concentration of loans to single borrowers poses credit risks, he added but the asset quality will maintain its relative stability.

The NPL as a ratio of gross-loan has been steadily going down since 2010. 

Theofilou added that the recent uptrend in loan growth has been due to the higher demand from Corporates. In recent years, the Kingdom was witnessing more demand from the retail segment than from Corporates. 

The agency added that the banking sector will maintain stable pre-provision income, amid a moderate increase in credit and overall business growth and broadly stable net interest margins and operating expenses. It described the sector as resilient in the face of challenges.