Bahrain offshore banking assets fell 10 pct in unrest

Bahrain offshore banking assets fell 10 pct in unrest

Offshore banking assets fell 10 pct in March; Bahrain declared martial law in March to quell unrest

May 4, 2011 4:07 by Reuters

Assets of Bahrain’s offshore banks fell 10 percent to $134.9 billion during the island kingdom’s political unrest in March, central bank data showed on Wednesday, their lowest levels since 2005.

At least 13 protesters and four policemen were killed and hundreds injured in clashes during protests that gripped the country for weeks in February and March.

Bahrain’s government declared martial law and invited troops from Gulf neighbours into the country to help quell the unrest in a crackdown on a protester camp near Manama’s financial district on March 16.

Central bank data showed that foreign assets of offshore banks fell while both their domestic assets and assets of local retail banks remained stable throughout the unrest.

The island kingdom established itself as the Gulf’s regional financial hub when money catered to by Lebanese banks left Beirut during that country’s civil war in the 1980s.

This status has increasingly been challenged by the rise of Dubai in recent years, and assets held by Bahrain’s offshore banks have now fallen to their lowest levels since 2005, before a regional oil and property boom boosted their assets.

(Reporting by Frederik Richter; Editing by Amran Abocar)