Click here for the hard truth about the current job marketAugust 31, 2015 8:50
Moving at Variable Speed
The GCC banking industry’s situation is extremely varied. While it is worrying in Bahrain and Kuwait, in Saudi Arabia and Qatar it is boom time once again, says Ranvir Nayar.
May 21, 2012 3:43 by kippreport
It also remains to be seen whether the country could actually ever reclaim its position as the “champion” of the region for the financial services industry, riding on the offshore banking and financial services hub that it had created. “In the GCC region, lying at the other end of spectrum, is a country like Bahrain. For more than two decades preceding the crisis, it had positioned itself as an offshore financial services hub, these entities, which were not limited to doing business in Bahrain or even the GCC, incurred losses all over the place when the bubble burst, making Bahrain extremely vulnerable,’’ says Vayanos of Booz & Co.
Bahrain’s problems have been compounded by the ongoing political instability that has made investment and business climate in the country less than conducive. Vayanos says that another major loss for Bahrain due to the turbulence was that it lost large numbers of talented and skilled manpower that was running the financial services industry in the country. These people have left Bahrain and moved to places like Dubai or Qatar, making it even more difficult for Bahrain to stage a comeback in this industry.
Kuwait: NBFCs and instability
Another troubled spot within the region is Kuwait. The country finds itself in a rather unique situation as the banks had significant exposure to investment companies, which were hit severely as they were exposed to local stock markets. The difficulty with these investment companies as they were stuck with illiquid stakes, so they defaulted on loans. This will take some time to resolve.