“The majority of the banks, including the foreign entities, working under normal circumstances amidst growing concerns of these prolonged protests in the country,” Bucheery told a Press conference where he was joined by the BAB CEO Robert Ainey.
“The liquidity situation among banks is at satisfactory levels and the operations are normal due to low pressure of consumer and commercial loans in the wake of the unfolding events in the MENA region started with Tunisia,” said Bucheery, who is also Chief Executive of the BBK.
“The banks had adopted a conservative approach on the commercial loans side just to minimize the loan exposure due to unfolding events in MENA,” he added.
“This low demand of loans have definitely contributed to the low pressure on the banks making it much easier for the financial institutions to navigate through the challenging times,” he said.
Bucheery admitted that the banks’ conservative approach towards consumer loans might be seen as an adverse development but the HM King’s Royal Gesture which would benefit 116,000 families with total distribution of BD 116 million cash would likely to bridge that gap largely.
“On the business sides, retail businesses and commercial entities are reporting negative impact on their businesses and that is also not much when compared with the Tunisia, Egypt etc.
He also ruled out rumours of flight of capital out of Bahrain and said on the contrary BBK had seen highest liquidity levels in past ten years.
“I have been around in BBK for last 10 years and not seen such surge in the bank’s deposits especially the long term deposits,” he added.
Despite a peaceful protests in nature, he said, if the situation remain unresolved in Bahrain for a longer period then banks might get affected.
Bucheery said some institutions’ ratings had been downgraded because of the Bahrain sovereign rating but it would be revised following the things come to normal.
“I am sure that the Kingdom of Bahrain will emerge much stronger after these events as the leadership is committed to bring about the structural changes in the system. This is one of the positive aspects of the political dialogue and these issues are left for the Government and the political people but overall level of optimism is much higher,” he explained.
The S&P said that it had taken action against four banks in Tunisia, two banks in Egypt, two banks and one insurance company in Jordan, and four banks and three insurance companies in Bahrain.