The markets have to maintain stability for the banking sector to become even more active, Bank Muscat International (BMI) Chief Executive Officer Jamal Ali Al Hazeem told the Bahrain News Agency.
Commenting on the profits made by the bank for the first half of 2012, the CEO said, the bank had posted profits all through the last two years and it was expecting to continue this winning streak even into the future.
“The old book has been provided for and our new book reveals a healthy trend. However, this is not to mean everything is in fine shape. We still do suffer from the condition of the market. Our fixed deposit is in good health and our balance sheet shows robust numbers, but the market is suffering from the draught that set in a while ago,” said Al Hazeem.
Asked for his comments on the way ahead for the growth of the financial institutions, especially in the banking sector, the CEO added that factoring in the prevailing market conditions it is not possible to look at what’s around the corner. Explaining this, he added that the Eurozone is not in good health, the US economy is not looking up, China is lagging behind from the projections it set.
“However, the banking sector in the region, thanks to the governments here, are not in the doldrums. The governments in this region continue to prop the market with their spending. It is important to continue this trend. If they stop, then things could be different,” the CEO added.
For BMI, the retail sector is most important, he said – with the consumer sector growing. “Our loan portfolio keeps growing and the remittances are no cause for alarm. We however look to the corporates leading the way, since corporates are the business people and they play a bigger role.”
With excess liquidity and growing stability in the debt market, banks in Bahrain are following the borrowers, he said.
“BMI has sustained patterns of growth which helps it climb out of major difficulties including the cleaning of the balance sheet,” the CEO said.?Negotiations are on with loan defaulters and this has resulted in an almost robust balance sheet, he added.
The overseas businesses in which BMI has a stake showed a sustained growth and the bank expects to keep its stakes in these, the CEO said.
The bank, he said, is negotiating with Tamkeen for another BD 10 million tranche. The BMI Bank contribution to Tamkeen’s loan portfolio has reached BD30 million. “We will continue to support such national initiatives,” he added.
For the first half of 2012 the bank announced a net profit of $0.8 million (BD0.3 million) as compared to a net loss after provisions of $13.7 million (BD 5.2 million) recorded over the corresponding period in 2011.