The combined net profits of Bahrain’s banks nearly doubled to $1.1 billion in the first three months of this year, compared to $427 million in cumulative profits during the same period last year, said a report.

The rebound in profits was across all -sectors of the banking industry, i.e. conventional wholesale and retail banks, as well as Islamic wholesale and retail banks, according to data compiled by the Central Bank of Bahrain (CBB),

The CBB revealed that the rebound in profits is a reflection of the recovery in Bahrain’s banking sector; despite a relatively weak global economic environment, banks have been able to capitalize on a strengthening domestic and regional environment.

The consolidated balance sheet of Bahrain’s banking system rose to $195.3 billion at March-end 2013, its highest level in nearly one year and up nearly 5 per cent over the December 2012 figure of $186.3 billion.

Bahrain’s retail banking industry continued to post steady growth, both in its loan portfolio as well as assets, reflecting the recovery of the domestic economy, the CBB data stated.

Conventional retail banks saw their net profits more than double toBD191.9 million ($509 million) during the first quarter, compared to BD94 million last year.

On the retail banks’ performance, CBB said the cumulative loan portfolio (to non-bank customers) grew to BD7 billion at March-end 2013. Of this, loans to the business sector grew to BD4.4 billion, from BD4.2 billion at March-end 2012, while personal loans grew to BD2.4 billion, from BD2.1 billion at the end of March 2012.

Bahrain’s conventional wholesale banking industry saw net profits soar by 365 per cent to $515 million during the first quarter of 2013, compared to $110 million at the same time last year.

According to CBB, the Islamic banking industry, both wholesale and retail banks, also posted a healthy increase in profits to $85.5 million for the first quarter compared to $67.1 million during the corresponding period last year.

The CBB has made concerted efforts to strengthen Bahrain’s regulatory environment and in doing so, it has worked to improve regulations, particularly those related to risk management, and encouraging banking consolidation.

The kingdom's central bank said it was committed to ensuring the soundness of banks as well as the banking system and work closely with the banking industry to maintain a robust financial sector that will continue to make a significant contribution to Bahrain’s economy.

Adhering to banking standards and best practices will lead to the strengthening of the business environment and also enhance the status of the financial sector and its ability to cope with risks resulting from fluctuations in the economic cycle, it stated.

"The CBB will also continue with its policy to encourage mergers in the banking sector which will lead to the creation of large entities capable of dealing with the developments in the local and international markets," it added.-TradeArabia News Service