Bahrain's financial services sector grew by four per cent in the first quarter of this year, representing 6 per cent year-on-year growth, said a report.

The Bulletin of Quarterly National Accounts by the Central Informatics Organisation also reports that the kingdom's insurance industry grew 5 per cent in the first three months of this year or 15 per cent year-on-year.

The news follows figures published by the Economic Development Board (EDB) last month showing the financial services sector contributed almost 23 per cent of the total increase in gross domestic product (GDP) over the last six years and is the largest contributor to total GDP, accounting for roughly one quarter by volume.

"Ethical values - the fundamentals of transparency and sound regulation - have formed the basis for the steady growth of our strong financial sector in Bahrain, built over the past 40 years," EDB chief operating officer Kamal Ahmed said.

"It is crucially important to our economy. More than a major sector in its own right, it is also the motor that drives so many other industries.

"A great financial centre draws investment to provide companies with the ability to grow their output, profits and jobs," he said.

Ahmed added that in bringing these wider benefits, the financial services sector plays an important role in achieving the ambitions of Bahrain's Economic Vision 2030.

Vision 2030 is designed to drive the private sector as an engine of growth, support further diversification of the economy and ultimately elevate national living standard by creating greater opportunities for Bahrainis.

This process is implemented under the guidance of His Royal Highness Prince Salman bin Hamad Al Khalifa, Crown Prince and EDB chairman.

Bahrain has a track record as the Gulf's most well-established financial services centre. This is against a strong regulatory backdrop.

The Central Bank of Bahrain (CBB) is the only single regulator in the Middle East and widely considered the best and most progressive in the region. Bahrain currently counts 169 onshore insurance firms in total and boasts another 39 firms registered offshore.

The kingdom also has a strong takaful sector, with nine companies that offer Sharia-compliant insurance products. Last month, the CBB was named Best Financial Centre for 2010 at the International Takaful Summit, reflecting the country's leading role in the industry. – TradeArabia News Service