Total assets of 34 Bahrain-domiciled banks are estimated to have grown five per cent last year, suggesting the start of a new phase of sustainable growth and increasing profitability, found a new research.

According to The Bahrain Banks Annual Review 2014,’ a joint project of the Bahrain Association of Banks (BAB) and BIBF, released yesterday (February 4), the benchmark indicator, which measures total assets, showed how the 34 Bahrain-domiciled banks have recovered from the low of $125.937 billion recorded in 2009, growing by 22 per cent to $153.478 billion in 2013.

By the end of the first half of last year, this had grown by $568 million to $154.046 billion indicating a consistent upward trend, said a report in the Gulf Daily News (GDN), our sister publication.

This strength is emphasised by individual bank results for the first three quarters, which again show a substantial growth in assets, pre-tax profits and loans and deposits, the report said.

The annual publication was unveiled during a press conference at the BIBF, addressed by the institute's director Solveig Nicklos, head of research Deen Jayah, Economic Development Board chief economist Dr Jarmo Kotilaine, BAB chief executive Robert Ainey and BAB publication The Bahrain Banker's editor James Grant-Morris.

The review says that the $12.320 billion increase in total assets between 2012 and 2013 was the biggest year-on-year improvement - eight per cent and shows that the recovery is very real and is gaining traction.

Net profit, the most closely-watched indicator in banking, rose from $1.322 billion in 2012 to $1.826 billion in 2013.

Extrapolating net profits of approximately $953m for the first half of last year shows that the banking sector is on target to exceed 2013's total, although it will be significantly short of the $2.212 billion recorded during the peak of the real estate boom in 2007.

However, it does show a huge jump from the lows of 2009 when local banks posted losses of $1.460 billion for the year. The review is based on the first study of its kind in the region, and contains a detailed analysis of Bahrain's domestic banking sector and how it compares with other countries in the GCC and the wider global banking sector, Mr Grant-Morris said.

"It is based on data sourced from Bureau van Dijk, a leading global provider of company information and business intelligence solutions," he added.

The review is also part of long-term project for maintaining a database on the performance and competitiveness of the banking sector in Bahrain.

Jayah said it was an extensive work of reference which looked in close detail at Bahrain's 34 registered banks over the five-year period ending in 2013.

"As well as detailing the key indicators of Bahrain's banking sector, the publication also compares and contrasts the conventional and Islamic and retail and wholesale categories and how individual banks have performed according to standard industry criteria."

According to Ainey, the fruits of The Bahrain Banks Annual Review 2014 would become apparent when banks and financial organisations used the raw data and the trends it identified to maintain a competitive edge and develop products that "demonstrate the innovation and creativity that drives the financial services sector in Bahrain".

Nicklos said the collaboration with BAB and Bureau van Dijk was a prime example of BIBF's commitment to advancing human capital and also supporting the banking sector by providing research and advisory services.

"Research is a major component of thought leadership, one that we are keen to employ as the sector looks towards its next phase of development," she said.

The 80-page review, which will be available in both hard copy and online, follows on from the inaugural Bahrain Banks Annual Review 2012, which was launched in April 2013.

It will be accompanied by a 384 page in-depth analysis of individual banks in Bahrain, which is also based on data sourced from Bureau van Dijk.

The Bahrain Banks Annual Review 2015 will be published later this year. The Economic Development Board is the lead sponsor of the project. - TradeArabia News Service