Manama, Kingdom of Bahrain – 22 October 2023 – The Central Bank of Bahrain’s (CBB) Board of Directors held its third meeting for the year 2023, chaired by Mr. Hassan Khalifa Al Jalahma on Sunday, 22 June 2023.
The board commenced the meeting by extending their gratitude and appreciation to HE Mr. Rasheed bin Mohammed Al Maraj for his fruitful efforts during his tenure as Governor of CBB. They also praised HE’s initiatives and accomplishments, which greatly impacted the development of CBB and improvement of employee competencies in handling various responsibilities and contributing to continuous prosperity. The Board also expressed to HE their best wishes in future endeavors.
Furthermore, the Board congratulated HE Mr. Khalid bin Ebrahim Humaidan on the occasion of receiving the royal trust from His Majesty The King and HE’s appointment as Governor of CBB, wishing HE would continue the efforts in further developing CBB in order to achieve desired goals.
During the meeting, the Board reviewed the topics on the agenda covering the performance report and developments in the financial sector for the third quarter of 2023 and the CBB’s financial performance report.
The Board also reviewed key monetary and banking indicators for the previous months, which proved the stability of the banking sector despite the fluctuations in global financial markets due to the increase in interest rates and continued quantitative tightening. On the local front, money supply increased to BD 15.8 billion at the end of August 2023, an increase of 3.8% compared to the end of August 2022. As for retail banks, total private deposits increased to BD13.9 billion at the end of April 2023, an increase of 3.1% compared to the end of August 2022. The outstanding balance of total loans and credit facilities extended to resident economic sectors increased to BD11.6 billion at the end of August 2023, an increase of 1.8% compared to the end of August 2022, with the Business Sector accounting for 43.2% and the Personal Sector at 50.9% of total loans and credit facilities. The balance sheet of the banking system (retail banks and wholesale sector banks) increased to $224.7 billion at the end of August 2023, an increase of 0.1% compared to the end of August 2022.
Point of Sales (POS) data indicated an increase in the number of transactions during the eight months of 2023 (January – August 2023), totaling 119.4 million transactions (77.6% of which were contactless), an increase of 14.6% compared to the same period in 2022. The total value of POS transactions in Bahrain during the eight months of 2023 (January – August 2023) totaled BD 2.7 billion (50.9% of which were contactless), an increase of 7.6% compared to the same period in 2022.
The banking sector maintained a high level of capital adequacy and liquidity, as the capital adequacy ratio of the banking sector reached 19.3% in Q2 2023. The capital adequacy ratios for the various banking sectors were 21.7% for conventional retail banks, 17.0% for conventional wholesale banks, 21.4% for Islamic retail banks, and 17.2% for Islamic wholesale banks.
The total number of Collective Investment Undertakings (CIUs) stood at 1667 CIUs as of the end September 2023. The total net asset value (NAV) of the CIUs decreased from US$ 11.8 billion in Q2 2022 to US$ 10.7 billion in Q2 2023, reflecting a decrease of 9.3%. Moreover, the NAV of the overseas domiciled CIUs decreased from US$ 6.4 billion in Q2 2022 to US$ 6.3 billion in Q2 2023, a decrease of 1.6%. Furthermore, the NAV of the Shari’a compliant CIUs increased from US$ 1.2 billion in Q2 2022 to US$ 1.4 billion in Q2 2023, reflecting an increase of 16.7%.
As for the Insurance sector, gross premiums (conventional and Takaful) generated in the domestic market amounted to BD 151.5 million in the six months ended 30 June 2023, showing a growth rate of around 3.1%, with general insurance business (including medical insurance business) contributing to around 90% of the gross premiums written for the same period of 2023.
Total gross premiums of the Medical insurance have increased from BD 46.78 million in the six months ended 30 June 2022 to BD 52.31 million in the same period of 2023, showing an increase of around 12%. Medical insurance is the largest in terms of total gross premiums which represented around 35% of the total gross premiums written in the period ended 30 June 2023.
The total gross premiums in Motor insurance class increased by 8% to reach BD 38.89 million in the period ended 30 June 2023 compared to BD 36.06 million in the same period of 2022. Motor insurance is the second largest class of insurance in terms of gross premiums which represented around 26% of the total premiums written in the period ended 30 June 2023.
Life insurance and savings products (Long-term insurance) generated gross premiums amounting to BD 15.90 million in the six months ended 30 June 2023 compared to BD 23.32 million in the same period of 2022. The long-term insurance premiums represented 10% of the total gross premiums written by insurance market in Bahrain in the six months ended 30 June 2023.