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KPMG report shows Bahrain’s banking sector maintain year-on-year growth

‘GCC listed banks results’ report

The recent released of the ‘GCC listed banks results’ report


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KPMG’s recently released version of the ‘GCC listed banks results’ report has shown that the banking sector in Bahrain maintained a year-on-year growth in 2017 with 6.4 percent growth in net profit and 5.6 percent growth in total assets.

The report, titled ‘Shifting Horizons’, analyzed the published results of listed banks across the region for the year ended 31 December 2017. Speaking about the report, Jalil Al Aali, Partner and Head of Financial Services at KPMG in Bahrain, commented, “We are delighted to launch the third edition of KPMG’s Gulf Cooperation Council (GCC) listed banks results report for 2017, which analyses the financial results for leading listed commercial banks in Bahrain and across the GCC. This report provides industry leaders with succinct analysis, insights and forward-looking views.”

Al Aali further commented that, “Overall, it has been a good year for listed banks in Bahrain despite the economic and political challenges facing the region. The positive report findings reflect the resilience of Bahrain’s banking sector. Impairment charges, non-performing ratios and funding costs have all increased, while liquidity continues to be a key focus area. Banks are therefore reshaping strategies, targeting higher quality domestic assets and looking at diversified funding sources.”

Looking to the future, Al Aali elaborated that, “There has been an increasing focus on financial technology in that past few years. We expect this focus will continue to grow as banks in Bahrain look to improve their customer experience and competitiveness through innovation and technology. This also sets to improve efficiency, given the funding cost pressures being faced, as well as the increasing regulatory requirements, such as Basel III and IFRS 9. We expect to see continued focus on controlling cost to ensure profitable growth remains and cost-to-income ratios are maintained at low levels.”

“Also the introduction of value-added tax (VAT), as expected in Bahrain by the end of this year, means that banks needs to make infrastructure investments to ensure their readiness to comply with the indirect tax regulatory compliance requirements. VAT also presents cash management and working capital funding opportunities for banks to fund businesses whose procurements are subject to incremental VAT costs and cash flows.” Al Aali added.

The report titled ‘GCC listed banks results: Shifting horizons’ (available here), analyses the results of selected listed banks in the GCC countries. It summarizes bank’s results against selected key performance indicators for the year ending 31 December 2017 and compares these with the same information for the year ending 31 December 2016.

The report findings highlight that the GCC banking sector remains relatively resilient amidst regional and global political and economic challenges, although they have not seen the double-digit growth rates seen in previous years. Overall, net profits have increased year-on-year by 6.7 percent, in comparison to last year’s decline, as a result of larger GCC economies. The region’s banking sector continues to focus on cost reductions and operating efficiency initiatives, largely driven by innovation and technology, as evidenced by declining cost-to-income ratios.

© 2020 KPMG Fakhro, a Bahrain partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. KPMG and the KPMG logo are registered trademarks of KPMG International, a Swiss entity. All rights reserved.

KPMG International Cooperative (“KPMG International”) is a Swiss entity.  Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm.

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