Central Bank of Bahrain (CBB) replaced the Bahrain Monetary Agency (BMA) on 7 September 2006.
Australian dollar, Euro (of course), Bahraini Dinar, British Pound, Canadian Dollar, Cypriot Pound, Jordanian Dinar, Kuwaiti Dinar, Omani Rial, and Swiss Franc.
Highly favorable tax environment: no personal income taxes, wealth taxes, Capital Gains tax or death duty tax or inheritance taxesStrategic location at the heart of the Arabian Gulf, providing ideal access to the GCC
The total assets of the Islamic banks grew at a CAGR of 43.2% during the period 2003-2006
Banking industry of bahrain
Vivek Jhala Angad Singh Banking Industry in Bahrain The decision to open up Bahrain to embrace all people indiscriminately was fostered in m e ever since I was a child. - Hamad bin Isla Al Khalifi
History Of Banking 1920 – Eastern 1973 – Central 1975 - OBU’s Bank (Standard Bank (Bahrain (Citibank and Chartered) Monetary Agency) Algemene Bank) 2006- BMA1944 – British Bank replaced by theof the Middle East 1970 – Oil Boom Central Bank of (HSBC) Bahrain 1957 – Bank of 1960 – Arab Bank Bahrain (NBB) Ltd.
Bahrain Facts• Financial Institution Sector – 2nd Highest contributor to the GDP Financial Sector Workforce 27% Bahraini Nationals Foreign Nationals 73%
Bahrain Currency• 1 Bahraini dinar = 2.6525 US dollars• 1 Bahraini dinar = 148.1430 Indian rupees (as on 6th September, 2012)
Attractions of Banking Business in Bahrain• Strategic location• Highly favorable tax environment• Stable currency and dynamic banking environment• No restriction on repatriation of capital, profits or dividends• Effective support and efficient banking regulation from the central bank
Attractions of Banking Businessin Bahrain• A world leader in Islamic Banking expertise• Attractive local and regional investment opportunities• Excellent communications network and communication infrastructure• A well educated and professional bilingual workforce• Relaxed lifestyle and cosmopolitan multi-cultural environment
Central Bank of Bahrain• Created on 6th September 2006• Replaced the Bahrain Monetary Agency (BMA)• Responsible for maintaining monetary and financial stability in the Kingdom of Bahrain• Single integrated regulator of Bahrains financial industry
Objectives1. Set and implement monetary, credit and other financial sector policies for the Kingdom of Bahrain;2. Provide effective central banking services to the Government and financial sector of the Kingdom;3. Develop the financial sector and enhance confidence therein; and4. Protect the interests of depositors and customers of financial institutions, and enhance the Kingdoms credibility as an international financial centre.
371 – No of Banks & Financial Institutions150 – Banking 151 – Insurance Institutions Firms 36 – Capital 34 - OthersMarket Brokers
Banking sector assets – growing at a faster pace.…
Islamic banking – increasing its penetration…..
FUTURE BANK Futurebank is a full commercial Bank promoted inBahrain and approved by the Central Bank of Bahrain (CBB). The Bank has its headquarters inManama, Bahrain. Future Bank was established on the 1st of July, 2004 as a Joint Venture Project between three highly reputed financial institutions - Bank Saderat Iran, Bank Melli Iran, and Ahli United Bank(AUB) Bahrain, with a strategic vision of becoming a unified entity which incorporates the strengths of all three of its constituents.
BOARD COMMITTEE MEMBERS• Mr. Gholam Souri(Chief Executive Ofﬁcer & Managing Director)• Mr. Mahmoud Reza Khavari (Chairman).• Dr. Hamid Borhani and Mr. Abdul Aziz Ahmed A. Malek Mr. Mahmoud Reza Khavari (deputy chairman).• Dr. Valiollah Seif and Mr. Gholam H. Zaferani (director).
THE BANK’S PHILOSOPHY ON CODE OF GOVERNANCE• To protect and enhance shareholder value.• To protect the interest of all other stakeholders such as customers,employees and society at large.• To ensure transparency and integrity in communication and to makeavailable full, accurate and clear information to all concerned.• To ensure accountability for performance and customer service andto achieve excellence at all levels.• To provide corporate leadership of highest standard for others toemulate.
Major Shareholders (5% and above)Name Nationality No. of SharesAhli United Bank through Bahraini 27,700,000itsTrustee arrangements withDana TrustBank Saderat Iranian 27,700,000Bank Melli Iranian 27,700,000
Income and Expenses (BD millions) • Net interest income 20.9 14.4 13.1 13.7 11.4 • Other income (0.7) 1.0 1.0 0.8 1.0 • Total income 20.2 15.4 14.1 14.5 12.4 • Operating expenses 4.0 4.0 3.5 3.3 2.6 • Proﬁt before provisions 16.2 11.4 10.6 11.2 9.8 • Net provision / write-back (6.7) (1.3) 2.4 (0.5) (1.0) • Impairment of goodwill (1.0) (1.0) - - - • Net proﬁt / (Loss) 8.4 9.1 8.2 10.7 8.8 • Financial Position (BD millions) • Total assets 532.3 524.3 547.5 547.5 498.1 • Net loans 141.3 151.7 118.4 113.1 83.3 • Due from banks 302.8 276.8 358.9 381.0 340.8 • Investments 36.5 50.3 12.4 8.8 10.2 • Total deposits 372.4 371.1 421.5 446.4 417.4 • Medium term borrowings 58.6 60.0 48.8 31.9 16.6 • Customer deposits 140.8 131.7 108.7 95.9 67.7
• Shareholders equity 96.6 88.2 73.7 63.3 58.2• Ratios (percentage)• Proﬁtability• Net income / Average equity 9.1 11.3 12.2 17.8 17.9• Net income / Average assets 1.6 1.7 1.5 2.1 2.4• Operating expenses / Total income 19.8 26.1 24.8 23.0 21.0• Earning per share (BD/USD) 0.105 0.128 0.152 0.237 0.209• Liquidity• Customer deposits / Net loan and advances 99.6 86.8 91.8 84.7 81.2• Loans and advances / Total assets 26.5 28.9 21.6 20.7 16.7• Liquid assets / Total assets 41.7 38.3 44.6 39.1 52.4• Capital Adequacy• Capital adequacy 20.2 25.7 21.0 15.6 20.0• Equity / Total assets 18.1 16.8 13.5 11.6 11.7
Operational achievements• In 2011, Futurebank reviewed its short to • In keeping with its unwavering commitmentmedium term operational stance within to the highest quality standards, FuturebankBahrain, with an aim to enhance its services renewed and extended its ISO 27001and ability to meet the needs of its growing certiﬁcation for another 3 years. Thiscustomer base. Most notably, the Bank achievement marks the Bank’s commitment toincreased the spread of its ATMs across the maintaining and enhancing quality standardsKingdom from 17 to 20. This drive was aimed across all areas of its operation.at increasing its customer service capabilities,as well as driving higher penetration levelsacross the local Bahraini market.
Products and services• Corporate banking• Retail banking• Treasury
CORPORATE BANKING• FutureBank provides client-centric banking solutions and offers a complete range of products and services designed to meet the requirements of Large and Medium Corporate clients, as well as High Net worth Individuals in Bahrain. These include working capital, trade finance and term loan products and facilities.• The Bank offers a various corporate banking products including Bahraini Dinar and Foreign Currency Debt, working capital credit, structured financing, syndication and transaction banking products and services.
Retail banking• Saving Bank Account• Current Accounts• Fixed Deposits• ATM Services• Remittances• Retail Loans
Treasury• Futurebank has its own Treasury Unit widely participating in trade related business between GCC Countries and Islamic Republic of Iran by way of forfeiting transactions.• Other areas of concentration:• Foreign exchange – spots and forwards in all currencies (including gulf currencies)• Inter-bank deposits.
Interest rates (Averages for the second quarter of 2012)• Average interest rate on personal loan: 5.59.• Business loan : 4.81.• Deposits : 1.11.• Money market(interbank rates):0.47 to 0.73.• Repos :2.25• Long term government bonds : 1.73.• Conventional retail banks charge varying rates ranging from no interest to as 10.58 for corporate loans.
Recommendation• Deal with Phising & Skimming• Focus more on Islamic Banking