The outlook for the Bahrain's banking sector is cautiously optimistic with the wheels of economic growth turning positive, said a top banking official.

Addressing shareholders at the annual general meeting (AGM),Farouk Almoayyed,the chairman of National Bank of Bahrain (NBB), said the bank had a strong capital base, adequate liquidity, a diversified asset portfolio and the largest distribution network in the kingdom and was therefore well positioned to capitalise on increased business opportunities against the backdrop of an anticipated recovery in the global and domestic economy.

Regionally, the bank's strategy of selective expansion in Abu Dhabi and Riyadh was progressing as planned with Riyadh branch in particular achieving significant increase in business and profitability, stated Almoayyed.

The treasury's concentration during last year was on efficient deployment of liquidity besides taking part in several domestic and regional issues, he added.

NBB reported an 8.1 per cent year-on-year increase in net profit which rose to  $136.60 million in 2013. Return on equity was 15.06 per cent and return on assets was 1.90 per cent.

The shareholders have approved cash dividend of 35 per cent amounting to $87.58 million.

NBB chief executive Abdulrazak Al Qassim said key performance indicators continue to be healthy as the bank progresses with implementation of its strategic plan by offering enhanced products and services.

"Bahrain's economy is expected to benefit from increased government spending and deployment of GCC Development Fund," noted Al Qassim.

"The increased focus on infrastructure and other social development projects will provide additional lending opportunities for the domestic financial institutions," he added.-TradeArabia News Service