Banks’ loans portfolio rises 7pc

MANAMA: The loans portfolio in Bahrain’s banking system saw an increase of seven per cent last year amounting to BD10,413.8 million at the end of December 2020.

Reviewing figures during the Central Bank of Bahrain (CBB’s) first board meeting this year, chairman Hassan Al Jalahma said the financial stability report for 2020 shows the strength of the banking sector despite the economic challenges due to Covid-19 as indicated by the capital adequacy, liquidity and non-performing loan ratios.

The report also indicated an increase in domestic liquidity in 2020, as the money supply in its narrowest sense – M1 (cash in circulation + private sector deposits on demand in BD) – increased by 11.2pc to BD2,921.1m as of end-2020 compared to end-2019.

The money supply in medium term – M2 (M1 + private time and savings deposits) – increased to BD12,840m as of end-2020, an increase of 6.5pc.

Money supply in its broadest sense, M3 (M2 + government deposits), increased by 3.5pc to BD14,151.3m as of end-2020.

The money supply is the quantity of currency available within the economy to purchase goods and services.

The CBB report said as for retail banks, total private deposits increased from BD11,517.1m as of end-2019 to BD12,247m as of end-2020, an increase of 6.3pc.

The outstanding balance of total loans and credit facilities provided to resident economic sectors amounted to BD10,413.8m as of end-2020 compared to BD9,736.4m as of end-2019, an increase of 7pc, with institutions accounting for 51.2pc of total loans and credit facilities, individuals 45.3pc and the government sector 3.5pc.

Point of sale (POS) data indicated an increase in the number of transactions during 2020, totaling 83,785,810 transactions (38pc of which were through contactless cards), an increase of 13.7pc compared to 2019.

The total value of POS transactions in Bahrain added up to BD2.3 billion (18.7pc of which were through contactless cards), a decrease of 4.2pc compared to 2019.

During the meeting, the board also reviewed the report on key economic, monetary and banking indicators for the year, and the measures taken by the CBB to contain the repercussions of Covid-19.

The report indicated improvement in economic indicators in the third and fourth quarters compared to the second quarter of 2020, as the real non-oil GDP increased by 1.3pc, as a result of the financial and economic stimulus package launched by the government of exceeding BD4.5bn, in addition to the gradual opening of some sectors and commercial activities.

The board reviewed the topics on the agenda and approved the CBB’s annual report and audited financial statements for 2020.





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