The Financial Thread

[Bahraini Spirit]

Bahrain 'most progressive banking centre'
MANAMA

MANAMA: Bahrain has been named one of the world's most progressive financial centres. It has won the Middle East and Africa category for the Financial Centres of the Future Awards 2005.

The awards are being given for the first time this year by the UK-based The Banker magazine, a sister publication of the Financial Times.

They are in recognition of financial centres which have made the greatest strides in terms of growth and infrastructure in the past year.

"Bahrain is the region's leading financial centre and the Gulf's longest established commercial and business centre," says the magazine.

The awards are based on criteria including the rate of growth of the financial services sector, regulatory quality and supervisory standards, infrastructure and business support services and overall political and economic stability.

[Bahraini Spirit]

Global financial hub

MANAMA: Bahrain has won a key international award, naming it one of the world's most progressive financial centres. It has been named winner in the Middle East and Africa category for the Financial Centres of the Future Awards 2005, by the UK-based The Banker magazine, a sister publication of the Financial Times.

The awards, presented for the first time this year, is in recognition of the financial centres that have made the greatest strides in terms of growth and infrastructure in the past year.

"Bahrain is the region's leading financial centre and the Gulf's longest established commercial and business centre," says the magazine.

"Many years of development and experience give Bahrain a strong reputation as a business and financial centre."

It notes that Bahrain offers a liberal and low-tax economic environment and is undergoing a series of important political and economic reforms.

The awards, presented in four geographic categories, which also included Asia and the Pacific, Western Hemisphere and the Caribbean, were based on a number of criteria, including the rate of growth of the financial services sector; regulatory quality and supervisory standards; infrastructure and business support services; and overall political and economic stability of the jurisdiction.

"The BMA is delighted to be the recipient of the Financial Centres of the Future Award," said BMA executive director, corporate services Dr Abdul Rahman Saif.

"Bahrain's continued development as a mature and sound international financial centre is a matter of pride and encouragement for all of us at the BMA, as we strive to ensure that Bahrain maintains its unrivalled reputation.

"The BMA also strives to maintain its own reputation as the most highly regarded and innovative regulator in the Middle East region."

A cornerstone of BMA's policy has been to implement international best practice to all aspects of financial supervision, said Dr Saif.

In this regard, the BMA continues its work on a major project to review and upgrade, where necessary, the regulatory framework for the entire financial services industry, covering banking, insurance and the capital market.

The work on the regulatory framework is matched by a new integrated licensing framework, which the BMA intends to finalise in the coming months.

The BMA complements its role as regulator with market development initiatives, which continue apace.

A new Trust Law is currently awaiting implementation and the recently issued takaful (Islamic insurance) framework, which is part of BMA's Insurance Rulebook, issued in 2005, is unique, said Dr Saif.

In addition, the BMA continues to pioneer innovative structures for Islamic debt market instruments.

"All this and other BMA initiatives, we hope, will continue to reinforce Bahrain's status as the pre-eminent financial centre and ensure the continued expansion of the country's financial services industry," he said.

[Skyline-BRN]

good to hear that were still top of our game on this sector.

[B-Patriot]

Yes, very re-assuring...Especially with more 'financial centre' projects popping up, such as the most recent island one in Jeddah...

[Bahraini Spirit]

BMA approval for two new banks

MANAMA: The Bahrain Monetary Agency (BMA) has authorised the establishment of two new investment banks - conventional and Islamic.

The new licences were approved earlier this month by Prime Minister and

BMA's Board chairman Shaikh Khalifa bin Salman Al Khalifa.

Gulf One Investment Bank is being established with a paid up capital of $100 million by reputed investors, mainly from Saudi Arabia.

The founders include trading groups and leading bankers, and the bank will provide investment banking products and services to its clients, mainly in the Middle East.

A licence has been granted for a second investment bank, with a paid up capital of $100m.

The bank is being established by prominent investors from Bahrain, Saudi Arabia, the UAE, and Qatar and will offer Shariah compliant direct investment management and complementary investment banking services in the GCC region.

[Skyline-BRN]

BANKS BOOM!

MANAMA

MANAMA: Bahrain's banking leaders have kicked off the year with soaring profits. The National Bank of Bahrain (NBB) yesterday reported its best ever year, while Bahrain Islamic Bank celebrated a near doubling of its annual profit. NBB announced a record profit of BD30.55 million for last year.

This was 8.1 per cent up on the BD28.26m profit recorded for 2004, the board announced after approving the results.

It is recommending a 40pc dividend totalling BD21.6m for shareholders and a BD1,527,706 payout in donations and contributions to community causes.

At year-end, the bank's total assets stood at BD1,498.10m, an increase of 10.2pc compared to BD1,359.47m at year-end 2004.

Bahrain Islamic Bank's net profit for last year soared by 99 per cent to a record BD7.4m, up from BD3.7m in 2004.

Its board is recommending shareholders' dividends at the rate of 27pc of the paid-up capital, up from 22pc last year.

Operational income rose to BD17.7m, up 63pc against the previous year's BD10.8m.

Investment returns soared by 144pc to BD5.1m, compared to BD2.1m the year before.

Total assets increased to BD321m, an increase of 26pc over 2004.

[B-Patriot]

Bank Assets Rise to $140bn



MANAMA: Bahrain's total banking sector assets grew by 18 per cent last year to reach over $140 billion Bahrain Monetary Agency (BMA) Governor Rasheed Al Maraj said.

This is equivalent to nearly 13 times the Gross Domestic Product and shows the robustness of the sector, he said.

"We are also seeing an increase in new entrants to the market. Last year, the BMA issued 23 new licences; additional applications had to be turned down because they didn't meet our licensing criteria," said Mr Al Maraj.

"International interest in doing business in the region and in using Bahrain as a location from which to conduct that business, is growing.

"In short, the financial services sector and with it the market for technology products and solutions, is expanding."

He was speaking at the opening of the Middle East Financial Technology Exhibition and Conference (MEFTEC) and the Government Technology Middle East Conference and Exhibition (GOVTEC) yesterday.

The three-day events are being held simultaneously at the Bahrain International Exhibition Centre (BIEC).

They are being organised by Media Generation in partnership with the BIEC.

The BMA is also a partner in the organisation of MEFTEC and the Central Informatics Organisation in GOVTEC.

MEFTEC is under the patronage of Mr Al Maraj while GOVTEC is under the patronage of Industry and Commerce Minister Dr Hassan Fakhro.

Mr Al Maraj said that the high levels of revenues and profits currently being enjoyed by established financial institutions offered a major opportunity to upgrade systems and enhance capabilities.

"Technology, if implemented effectively and at reasonable cost, can provide institutions with real competitive advantages, in levels of service, cost or capabilities," he said.

Mr Al Maraj said that security is also firmly on the BMA's agenda this year.

"As technology evolves, so do the risks to confidential client information and financial assets," he said.

"ATM and credit card fraud, for instance, is a significant world-wide phenomenon. The isolated cases of ATM fraud that recently occurred here show that Bahrain is not immune to these risks.

"We take these issues seriously, as witnessed by our existing requirements and examination procedures.

"However, because technology and the types of threats continue to evolve, we will continue to review banks' security procedures and our regulatory requirements.

"Modern technology can play a part in minimising security risks and we expect banks to make use of the solutions available in this respect.

Dr Fakhro said that the Middle East region was a fast emerging market with a huge purchasing power. "It has a population of almost 240 million and, growing at a rate of almost 4pc per annum and according to UN population forecasts expected to increase to 500 million by the year 2050," he said.

"It is also one of the world's fastest growing markets for banking and financial technologies. In 2004, the banks and financial institutions in the region spent over $1bn on technology acquisition and upgrades. Financial technology makes up almost 12.5pc of the total regional IT demand of some $8bn."

Microsoft Gulf general manager Charbel Fakhoury said the region showed a lot of potential, with an average year on year GDP growth of over 6.2pc, along with oil price increases in the past 12-18 months and supported by a positive and stable political environment.

"This allows both public and private sector investments in long-term sustainable sectors such as finance, telecommunications, education, healthcare, petrochemicals, trade, tourism, energy, and real estate," he said.

[B-Patriot]

Bahrain to host $20 billion Islamic bank

Manama

Bahrain will host the largest global Islamic bank, with an authorised capital of $20 billion (BD7.5 million), of which $10 billion will be subscribed and 50 per cent paid up. Bahrain Monetary Agency (BMA) has licensed Al Masref as a full-fledged commercial bank that will operate under Sharia principles.

BMA also revealed that significant numbers of international and regional financial institutions were seeking licences. Thirty-two new ones were approved by BMA last year, bring the total to 366, it was announced yesterday.

Bahrain remains the first choice for financial institutions in the Middle East, said BMA's licensing and policy director Ahmed Al Bassam.

The region continues to offer tremendous growth prospects for financial service providers, particularly in the areas of asset management, private banking, life and medical insurance, securitisation, Islamic banking, third party administration services and leasing banking services, he said.

The implementation of a new single licensing framework during 2006 will greatly enhance flexibility for those wishing to do business in and from Bahrain.

Of the new licences issued during 2005, 24 were for banking-related institutions, seven for insurance and insurance-related operations, and one for capital market broker.

[Pearl of the Gulf]

date: 04-06-2006

Manama, June. 4 The Bahrain Monetary Agency (BMA) has granted two licenses for a diverse range of banking activities.

The new licenses were approved this month by the Prime Minister and Chairman of the BMA board, Shaikh Khalifa bin Salman Al Khalifa. A license has been issued to American Express Bank Limited to open its first representatives office for private banking in MENA Region. The Bank which is incorporated in London is wholly owned subsidiary to American Express Bank in New York. This license will bring the number of AMEX entities in Bahrain to three entities since AMEX use Bahrain as centre for its operation in the region since 1976. The BMA also granted a second license to Dexia Group to open a Representative Office for Dexia Asset Management Luxembourg S. A. (Dexia AM) in the Kingdom of Bahrain. Dexia is already present in Bahrain with a representative office of Dexia Private Bank Switzerland. Dexia AM believes that it will use Bahrain office its Institutional Sales and Distribution Activity as first entrance in to the Middle East region. The total assets of the group stood at Euro 509 billion at 2005 end. In general, the region continues to offer tremendous growth prospects for financial services providers, particularly in the areas of asset management, private banking, life and medical Insurance, securitisation, Islamic banking. Third party administration (TPA) services, leasing and Investment.

more good news.

[Bahraini Spirit]

BMA plans major workshop in Japan

MANAMA: The Bahrain Monetary Agency (BMA) is holding a major workshop in Tokyo, Japan, to foster a better understanding of Islamic finance and Bahrain's importance as the premier financial centre in the Middle East.

The event, entitled Islamic Finance: Opportunities in Banking and Insurance, will be held on June 12 at the Japan National Press Club.

It will feature a presentation by BMA governor Rasheed Al Maraj, who will highlight the development of Islamic finance and the agency's approach to regulating Islamic financial institutions.

Economic Development Board (EDB) chief executive Shaikh Mohammed bin Isa Al Khalifa will also provide an overview of the strength of Bahrain's economy and the wide-ranging investment opportunities in the country.

Bahrain Institute of Banking and Finance's Islamic Finance Learning Centre head Dr Taha Eltayeb Ahmed, who will define the basic concepts of Islamic finance and outline the latest developments and opportunities in the rapidly growing industry.

BMA Licensing and Policy for Islamic Financial Institutions head Abdul Rahman Tolefat will provide an understanding of Islamic insurance (takaful), the opportunities for growth and BMA's regulatory framework for the takaful industry.

The workshop, which is the first of its kind to be organised by the BMA in Japan, targets a select audience of representatives of Japan's financial services industry, decision makers, opinion makers and the media.

"This is the most significant effort to be made by the BMA in Japan, to promote greater awareness of Islamic finance and the tremendous potential this rapidly growing industry offers," said Mr Al Maraj. "We hope this workshop will create new opportunities for co-operation in the economic and financial arenas between Bahrain, which is the gateway to the wider Middle East region, and Japan, a major world economy."

[Skyline-BRN]

Arcapita doubles equity capital to $800 million
Posted: Monday, June 26, 2006

Abdulaziz Aljomaih

Manama

Arcapita Bank, a leading international investment firm in Bahrain, has announced that it has completed the doubling of its issued equity capital base from approximately $400 million to more than $800 million.

The $400 million equity capital increase comprised a $200 million rights issue to existing shareholders and a $200 million new share issue to strategic investors.

Atif A Abdulmalik, Arcapita's chief executive officer, said: "We are very pleased that the capital increase we announced in May has now been successfully completed, with a 150 per cent over subscription for the new share issue. After the rapid growth of the business to date, the doubling of our equity capital base has strengthened our balance sheet considerably. This will allow further diversification of the products and services that we offer to our investors, as well as an expansion of our global footprint, including opening a new office in either Singapore or Hong Kong, to support continued business development opportunities in Asia."

Arcapita currently sources its investments from its three offices in North America, Europe, and the Middle East and last year, expanded its international reach into Asia by making its first investment in Japan.

Abdulaziz Aljomaih, vice chairman of Arcapita added: "Arcapita's net income and balance sheet continues to grow significantly and we foresee considerable further growth opportunities. In line with the Bank's conservative balance sheet management philosophy, the equity increase will support this growth, whilst allowing the Bank to maintain prudent financial ratios."

Over the last eight years, Arcapita's net income has grown at a compounded annual growth rate of 37 per cent and its balance sheet has grown to approximately $1.9 billion as at 31 December 2005. Arcapita has completed 53 transactions with a total transaction value of approximately $12 billion during this period.

The completion of the capital increase, which is subject to legal and regulatory formalities, follows the recent announcement that Arcapita and its affiliates had signed definitive agreements to complete Arcapita's largest transaction to date, the €620 million acquisition of Paroc Holding Sverige AB, a leading European manufacturer of high grade insulation products.

Arcapita has completed 53 transactions with a total transaction value of approximately $12 billion during this period.

link

[Bahrain Researcher]

Hi,
I am doing research into Bahrain and, basically, trying to find out as much as possible.

I am trying to find out what private companies there are that are commercially trying to encourage foreign investment (particularly European) in Bahrain - particular by organisations and high nett worth individuals (so not really small investors). All areas interest me, but particularly Financial Services, Petrochemical and downstream, and property.

I know about the government organisations like the BMA and the EDB but am struggling to figure out which companies in Bahrain are doing it as part of their commerical activity.

Any help would be enormously appreciated!

[Elmahri]

Bahrain's financial sector contributes (GDP) BD965 million

MANAMA: Bahrain's financial sector is the top contributor to the country's economic growth for the third successive year, it was announced yesterday.

The sector's contribution to the Gross Domestic Product (GDP) has increased from BD820.1 million in 2004 to BD965.7m last year.

"This is an increase of around BD145.6m in the GDP, with a rise rate of 17.8 per cent," Central Informatics Organisation Under-Secretary Ahmed Al Amer told a Press conference at the CIO premises in Isa Town.

"The rise increased the sector's contribution to 27.6pc of the GDP.

"This shows that confidence in Bahrain's monetary sector is growing year after year and more growth is expected hopefully this year."

Bahrain achieved a GDP of around BD3.5 billion last year, with an increase of BD253.7m from BD3.24bn in 2004, or 7.8pc, said Mr Al Amer.

"Stable rates have also increased from BD4.2bn in 2004 to BD5bn last year, with an increase of BD826.7m at a rate of 19.7pc.

He said that the 7.8pc increase had been achieved despite the drop in oil production rate in Abu Safah and the Bahrain Field.

"Investments, consultancy and administrative work have contributed to the increase in the monetary sector, in addition to interest-free revenue," said Mr Al Amer.

"The rejuvenated stock markets in the region and the developments in world markets have contributed to growth in the monetary sector.

He said that insurance markets' contribution to the monetary sector had increased.

"It showed an increase of BD30.9m, from BD176.3m in 2004 to BD207m last year," said Mr Al Amer.

He said that the government services sector came in second after the monetary sector.

"It has achieved BD506.4m last year, with its share of the GDP being at around 14.5pc," said Mr Al Amer.

"The oil and gas sector has dropped to fifth in the GDP share, with 11 pc, as it just achieved BD388.2m last year.

He said downstream industries accounted for 13.3pc of GDP, with rises in aluminium, oil industries and refining, liquid gas and petrochemical-related industries.

"The demand for those products in international markets has boomed, in addition to a similar demand for building and foodstuff industries," said Mr Al Amer.

"The real-estate and business services sector contribution to the GDP has increased from BD277.8m in 2004 to BD296.5m last year, an increase of BD18.7m, at a rate of 8.4pc.

Mr Al Amer said that the transportation and telecommunications sector was close to the real estate and business services sector.

"It has achieved BD299.8m last year, an increase of 8.5pc from 2004," he said.

The broad components of GDP are: consumption, investment, net exports, government purchases, and inventories.

Consumption is by far the largest component, totalling roughly two-thirds of GDP.

[Bahraini Spirit]

Now this is great news, definately one of the banks you'd want around. Oh ya, this is around a week old:

Central Bank of Bahrain grants two licences to The Royal Bank of Scotland Group

The Central Bank of Bahrain (CBB), formerly the Bahrain Monetary Agency, has granted a licence to The Royal Bank of Scotland (RBS) for establishing a Representative Office in Bahrain.

The CBB has also granted a licence, separately, to Coutts & Co, the private banking arm of The RBS Group, which posted a total Group income of US$48.6 billion in 2005, while assets amounted to US$1.6 trillion.

From Bahrain, RBS & Coutts & Co will focus on mainly two lines of business, wholesale banking and private banking. The Bahrain Office will also support RBS activities in the area of project finance and explore opportunities in Islamic banking.

This will be RBS's first on-ground representation in the Middle East and North Africa (MENA) region.

The two licences were approved earlier by HH Shaikh Khalifa bin Salman Al Khalifa, Prime Minister of the Kingdom of Bahrain and Chairman of CBB's Board.

'The CBB is delighted to welcome the RBS Group to Bahrain's mature and well-diversified international financial centre,' said Mr. Ahmed Abdul Aziz Al Bassam, Director, Licensing & Policy, at the CBB.

'The countries of the Gulf Cooperation Council (GCC) are experiencing a renewed economic boom and a presence in this market will, without doubt, strengthen The RBS's business not only in this region but in the wider Middle East as well.'

The RBS, founded in Edinburgh in 1727, is largest bank in UK, the 2nd largest bank in Europe and 5th largest in the world in terms of market capitalization. The RBS Group comprises National Westminster Bank (NatWest), Child & Co, Citizens, Coutts & Co, Direct Line, Drummonds, Isle of Man Bank and Ulster Bank.

Coutts & Co, originally founded in 1692, provides wealth management services to over 90,000 private clients through 40 offices worldwide. From Bahrain, Coutts & Co will focus on private banking and institutional investors.


'As an institution with exceptional credentials in a broad range of banking and financial services, the RBS Group's presence in Bahrain will add considerable value to the country's expanding financial community,'



said Mr. Al Bassam.

On its part, the CBB is committed to providing a business-friendly environment, underpinned by a strong and internationally accepted regulatory framework, which will help further advance the country's financial service industry.

Recent initiatives include the enactment of a Trust Law, which governs trustees and trust administration services. The Trust Law broadens the range of specialized services that can be offered by financial institutions and will also enhance the development of investment products, both conventional and Islamic, that could be offered using the trust mechanism, such as real estate investment trusts and private pension schemes.

Bahrain enjoys a sovereign foreign currency debt rating of 'A' from leading international rating agency Standard & Poor's (S&P), he pointed out.

Bahrain's banking system is ranked on a par with developed countries by FitchRatings, in the Fitch Banking System Indicator (BSI). Bahrain has been ranked in Category B of the BSI, which is a measure of intrinsic banking system quality or strength.

Bahrain's financial sector is a key segment of the country's national economy. It represented 27.6% of Bahrain's gross domestic product (GDP) in 2005.

[Moody]

RBS is a well known and considered one of the most respected european banks.

i hope they will select BFH..

[Garden city]

Hey guys we should look out for posting more news in this thread. Banking is one of the most important (if not the most important) industry in Bahrain.

Anyway here is some news about Bahraini banking sector.

(MENAFN - Bahrain Tribune) Bahrain's claim to the financial centre of the Middle East has received a boost from the latest analysis of the sector by investment firm Global Investment House

In its report into the Kingdom's banking sector it points out that business is booming for the financial industry.

The report states: "Most banks in Bahrain have reported healthy growth in assets at the end of 2006. The cumulative net profit of the listed banks reported a growth of 29.41 per cent to BD182.57 million in 2006 as compared with BD141.08 million in the previous year.

"Bahrain Islamic Bank surged by 76.6 per cent to reach BD13.05 million in 2006 as compared with BD7.39 million in the previous year, registering the highest growth among the listed banks. Ahli United Bank (AUB), the largest listed bank, reported net profit of BD97.20 million in 2006 as compared with BD71.55 million in the previous year, an increase of 35.86 per cent."

It continues: "Overall, the banks in Bahrain have prudently managed their interest rate spreads between assets and liabilities, thereby achieving higher net interest income during 2006. The listed banking segment in Bahrain continues to remain concentrated as the top two commercial banks - Ahli United Bank and Bank of Bahrain and Kuwait - control 80.55 per cent of total banking assets, 72.57 per cent of customer deposits, and 80.66 per cent of net loans at the end of 2006."

The strong growth of Islamic banking and its impact on financial markets has prompted a number of traditional local and international banks to seek stronger relationships and joint project financing arrangements with their Islamic counterparts, the report argues.

The total assets of Islamic banks operating in Bahrain stood at $11.21 billion at the end of 2006, which was an increase of 52.4 per cent over its 2005-year end level. The growth in assets was mainly fuelled by 55.5 per cent rise in foreign assets of the banks, which also contributes more than half of the total assets of Islamic banks. At the end of 2006, the net foreign assets of the banks jumped from $774.6 million in 2005 to $1.03 billion, an increase of 33.1 per cent.

The report concludes: "The growth in the Islamic banks during the last three years augurs well for Bahrain, as Bahrain wants to become the Islamic banking hub of the region."

[Bahraini Spirit]

CBB approval for Swiss private bank to upgrade Bahrain operation

The Central Bank of Bahrain (CBB) has granted approval for Dexia Private Bank (Switzerland) to expand its Bahrain operation.

The CBB approval allows Dexia Private Bank to upgrade its existing Representative Office in Bahrain to a full branch status, under the CBB licence category of 'Wholesale' bank.

Dexia Private Bank, which is a subsidiary of the Dexia Group, established a Representative Office in Bahrain in 2005, the Dexia Group's first presence in the GCC region. This was followed in 2006 by the establishment of a Bahrain office of Dexia Asset Management (Luxembourg), a provider of asset management solutions for institutional investors.

The Dexia Group is a major player in retail financial services, investment management services and treasury and financial markets in Europe. It is also among the top European banks for project finance. The Group posted a net income of US$3.7 billion in 2006, while total assets stood at US$766 billion.

Dexia Private Bank's Bahrain Representative Office offers a wide range of financial products, such as structured finance, investment funds, Shari'a-compliant investment products and alternative products, but also financial engineering and customized project financing. The Bank targets high net worth individuals as well as institutional investors in Bahrain and the region, as part of its plans to grow the bank's Middle East business from its hub in Bahrain.

The Bank is among more than 30 international institutions providing wealth management services from Bahrain.

'The CBB welcomes the expansion of Dexia Private Bank's Bahrain operation, which will now include the booking of assets in Bahrain,' said Mr. Ahmed Abdul Aziz Al Bassam, Director, Licensing & Policy, at the CBB.

The private banking opportunity in the GCC and wider Middle East & North Africa (MENA) is significant, he pointed out. With the wealth of the region's high net worth individuals estimated at US$1.3 trillion, and forecast to grow to US$1.8 trillion by 2010, the environment for wealth management professionals will remain lucrative for the coming years.

However, the region's investors have become increasingly sophisticated investors, challenging private banks and wealth managers to provide innovative investment solutions.

'As the single regulator for the financial services industry in Bahrain, the CBB has taken a number of initiatives in enhancing the regulatory environment, to enable Bahrain-based financial services providers to meet the growing needs of their customers,' Mr. Al Bassam said.

The enactment last year of a Trust Law in Bahrain has also broadened the scope for private banks to take a more holistic approach to wealth management by also offering non-financial services, such as trusts.

The CBB is also on schedule to issue soon an upgraded and more comprehensive regulatory framework for the fund industry. The new framework will include Bahrain's first-ever rules allowing collective investment undertakings (CIUs) targeting professional investors. It will also permit exempt schemes subject only to limited regulation (such as hedge funds), which may only be sold to a high net worth institutional and investor base.

'The CBB is cognizant of the ever-evolving needs of the financial services industry and we are committed to enabling the continued growth and advancement of financial institutions based in Bahrain,' said Mr. Al Bassam.

[Bahraini Spirit]

CBB licence for Allianz Group

The Central Bank of Bahrain (CBB) has granted a licence to Germany's Allianz Group, the world's second largest insurance firm, to establish an insurance operation.

Allianz Takaful (Bahrain), domiciled in Bahrain, will serve as the Allianz Group's global hub for Islamic insurance (takaful). It is being established as a wholly-owned subsidiary of Allianz Group.

Allianz Takaful (Bahrain) will undertake family takaful, with a focus on life insurance, investment-linked insurance as well as health and medical insurance.

The Munich-based Allianz Group, founded in 1890, is today the largest insurer in Europe and the second largest in the world, with premiums of nearly US$52 billion. Allianz is also one of the world's largest asset managers, with assets in excess of US$1 trillion under management.

The Group posted a net income of US$9.2 billion for 2006.

'The CBB is delighted to welcome the Allianz Group to Bahrain's well-diversified financial services community and to the growing insurance industry,' said Mr. Ahmed Al Bassam, Director, Licensing & Policy, at the CBB.

Robust economic growth, renewed Government investment in large infrastructure projects and strong private sector investment in real estate and other economic sectors are contributing to the expansion of the insurance sector. In addition, increasing public awareness and acceptance about the need for insurance is also contributing to the growing demand for insurance products, both conventional and Islamic.'

'Public perception on life insurance, in particular, has changed considerably with the introduction of takaful and now represents a huge, fairly untapped opportunity,' said Mr. Al Bassam.

'The entry of a global insurance player, such as Allianz, in the takaful arena also points to the tremendous potential of this line of business.'

On its part, the CBB is committed to advancing the promising insurance sector by ensuring that Bahrain continues to maintain its premier position as an excellent base for insurance and other financial services providers. The CBB Insurance Rulebook provides a clear and transparent regulatory framework for Bahrain's insurance industry.

The licence for Allianz is the third to be granted by the CBB in recent months to an international insurance giant to establish a takaful or retakaful operation in Bahrain.

[Bahraini Spirit]

A few months old but very significant:

Global Insurer AIG Launches New Takaful Venture, AIG Takaful

Recognising the diversity and growth of the Takaful insurance market, international insurance leader AIG launched AIG Takaful today, a regional company headquartered in Bahrain, providing Shariah compliant insurance solutions (Takaful). AIG Takaful will provide a range of Takaful products, including accident & health, motor, personal contents, property and casualty.

Charles Bouloux, Chairman AIG Takaful said at the launch today: “The phenomenal growth of the Takaful market is something that AIG, as a market leader, recognizes. We want to support this growth and offer socially responsible insurance solutions to consumers in this region.”

”AIG’s management has a philosophy of acting responsibly and providing quality service to corporations and consumers,” Charles Bouloux continued. “We have a recognized ability to introduce innovative and culturally sensitive products focused on local market conditions, and we believe that this will enhance the overall development of the Takaful industry in this region.”

AIG Takaful, was licensed by the Central Bank of Bahrain (CBB), formerly known as the Bahrain Monetary Agency, in July 2006.

AIG Takaful’s Shariah Supervisory Board is comprised of well-known Shariah scholars, Sheikh Nizam Yaquby, Dr Mohammed Elgari and Dr Imran Usmani.

The launch in Bahrain was attended by several top officials from the CBB, including Mr. Rasheed Mohammed Al Maraj, Governor; Mr. Abdul Rahman Al Baker, Executive Director, Financial Institutions Supervision and Mr. Ahmed Al Bassam Director, Licensing & Policy.

Commenting on the occasion, Mr. Al Maraj said: “We welcome the interest shown by a leading firm such as AIG in supporting the growth of takaful and in choosing Bahrain as the headquarters for its takaful subsidiary.

“CBB has worked hard to create a strong, market-friendly regulatory framework which, we believe, is essential for the sound growth of Bahrain’s insurance sector, including takaful, and a precondition for attracting reputable insurance companies to locate in Bahrain.”

AIG Takaful, a member company of AIG, also benefits from AIG’s disciplined global underwriting standards and 87 years of experience in delivering innovative insurance solutions to the international community through a network that currently spans more than 130 countries, reaching 65 million customers.

“AIG continues to build on its history as a pioneer in the region with the launch of AIG Takaful,” Charles Bouloux continued. “As a world insurance leader, we see AIG Takaful as an investment in the future of socially responsible insurance. Launching our flagship headquarters in Bahrain today is just the start.”

###

About AIG:
American International Group Inc. (AIG), world leader in insurance and financial services, is the leading international insurance organization with operations in more than 130 countries and jurisdictions. AIG companies serve commercial, institutional and individual customers through the most extensive worldwide property-casualty and life insurance network of any insurance company. In addition, AIG companies are leading providers of retirement services, financial services and asset management around the world. AIG’s common stock is listed in the U.S. on the New York Stock Exchange as well as the stock exchange in London, Paris, Switzerland and Tokyo.

[Bahraini Spirit]

Also a few months old but again, quite significant:


CBB LICENCE FOR INTERNATIONAL INSURER, ACE GROUP

The Central Bank of Bahrain (CBB) has granted a license for the ACE Group of insurance and reinsurance companies to establish a Representative Office in Bahrain.

The ACE Group is one of the world’s largest global property and casualty insurance and reinsurance organizations. The Group addresses the insurance needs of commercial and individual customers in more than 140 countries and jurisdictions.

The CBB approval for a Representative Office in Bahrain is the second license to be granted to the ACE Group, which has operated an offshore unit from Bahrain since 1989.

The Bahrain Representative Office will serve as the ACE Group’s headquarters for the group’s existing subsidiaries and future operations in the Middle East and North Africa (MENA) region. In future, the ACE Group plans to offer insurance services in Bahrain and other countries in the region.

ACE Limited, the holding company of the ACE Group, is a component of the S&P 500 stock index. The Group wrote net premiums of US$11.8 billion in 2005, with total assets of over US$62 billion.

“The CBB welcomes the ACE Group’s intention to expand its operations in Bahrain,” said Mr. Ahmed Al Bassam, Director, Licensing & Policy, at the CBB.

“We are confident that the ACE Group will make a positive contribution to the growth and development of Bahrain’s financial sector, in general, and insurance industry, in particular.”

Bahrain has a well-diversified insurance industry and the Kingdom provides an excellent regional base from where the insurance industry can prosper and grow, he said.

“The region provides extremely promising prospects for providers of insurance services,” said Mr. Al Bassam.

“The Middle East region is one of the most under-insured regions in the world. However, structural reforms, notably in areas such as health and pensions, are now beginning to unlock the potential for insurance services that exist in this region.”

The rapid population growth in the MENA region will require substantial investment in infrastructure which will in turn lead to further increased demand for insurance and insurance related services.

“The CBB is committed to working with the industry in order to facilitate its full potential,” said Mr. Al Bassam. “A strong vibrant insurance sector is an essential component of financial stability and a country’s economic development.”

Mr. Andrew Kendrick, Chairman and CEO of ACE European Group, said: “ACE is very pleased to be able to establish a new regional office in Bahrain. This development reflects both the attractiveness of Bahrain as a location, and the belief that, with ACE's strong capabilities in a number of specialist areas such as energy, technical, financial and consumer accident and health business, the MENA region offers great opportunities for growth in the coming years.”