By KPMG: GCC listed banks’ results, Embracing digital, end 2018
Under the Central Bank of Bahrain’s (CBB’s) regulatory regime, 382 financial institutions were licensed and regulated as of 31 December 2018. They include 25 conventional retail banks (including branches of foreign banks) and 51 conventional wholesale banks. The Islamic segment includes six retail banks and 15 wholesale banks.
Retail banks’ total assets increased from $95.1 billion in 2017 to $96.0 billion in 2018 representing 1% growth. The retail banking assets have been witnessing year-on-year growth since 2009 and the trend is expected to continue.
Financial performance In 2018
All listed retail banks reported profits with six banks reporting increase in profits compared to the prior year. One bank reported stagnant growth and two banks reported negative growth in profit. ROE was in the range of 0.6–17.1%.
Digital, fintech – technology focus Bahrain has been active in hosting various events, conferences, workshops on fintech throughout 2018. This has put Bahrain at a significant position in the digital technology world as an attractive destination for investment. The evolving technology has paved the way for digital payment solutions, being launched in Bahrain (bwallet, VIVA Cash, MaxWallet, BenefitPay), which has changed the complete dynamics of traditional banking system. Innovations are expected to continue with the support of the CBB in the finance sector, which would open opportunities.
Fintech bay Bahrain FinTech Bay (BFB) is a fintech ecosystem launched in February 2018 by the Bahrain Economic Development Board (EDB) and Singapore-based FinTech Consortium (FTC). BFB is dedicated to further develop and accelerate fintech firms and drive innovation in Bahrain.
Since the introduction of EFTS in 2015, the number of participants in EFTS has reached 26, growing significantly and gaining popularity over the years. For example, the average daily volume of Fawri nearly doubled to 15,484 from 2016 to the first half of 2018 with daily average value of $79.6 million compared to $66.3 million in the first half of 2016. Daily volume of Fawri+ increased significantly by 734% in the first half of 2018 compared to the same period in the prior year. The average daily value of Fawri+ increased by 500% ($1.1 million) in the first half of 2018 compared to the first half of 2016. The various types of EFTS (Fawri, Fawri+, Fawateer) have been operating seamlessly with virtually no errors. E-wallets Bahrain witnessed the launch of four digital wallets in the last two years including two in 2018. These are bwallet, BenfitPay, VIVA Cash and MaxWallet. This is a significant step by Bahrain to realize its vision as a technology pione