The Central Bank of Bahrain’s (CBB) Board of Directors held its first meeting for the year 2022, chaired by Mr. Hassan Khalifa Al-Jalahma on Sunday, 27 March 2022.
The Board reviewed the topics on the agenda and approved the CBB’s annual report and audited financial statements for the year 2021, in addition to reviewing the CBB’s activities for 2021.
The Board also reviewed the CBB’s performance report and developments in the financial sector for the first quarter of 2022 and the CBB’s financial performance report as of end of February 2022.
During the meeting, the board also reviewed the report on key economic, monetary and banking indicators for 2021. In fact, recent months data showed stable liquidity, whereby money supply in its broad sense, M3 (M2 + government deposits) totaled BD 14.9 billion at the end of January 2022, an increase of 6.4% compared to end of January 2021. As for retail banks, total private deposits increased to BD12.9 billion at the end of January 2022, an increase of 5.6% compared to end of January 2021. The report also indicated that the outstanding balance of total loans and credit facilities provided to resident economic sectors increased to BD10.9 billion at the end of January 2022, an increase of 3.8% compared to end of January 2021, with Business Sector accounting for 48.6% and Personal Sector at 47.1% of total loans and credit facilities.
Point of Sale (POS) data indicated an increase in the number of transactions during the fourth quarter of 2021 (October 2021 – December 2021), totaling 38.0 million transactions (70.7% of which were through contactless cards), an increase of 51.5% compared to the same period in 2020. The total value of POS transactions in Bahrain during the same period (October 2021– December 2021) totaled BD 974.0 million (44.0 % of which were through contactless cards), during the fourth quarter of 2021 an increase of 41.9% compared to the same period in 2020.
The banking sector maintained a high level of capital adequacy and liquidity, as the capital adequacy ratio of the banking sector amounted to 18.6% in the fourth quarter of 2021 compared with 18.3% in the third quarter of 2021, which is higher than the minimum of 12.5% required by the CBB. The capital adequacy ratio for the various banking sectors in the fourth quarter of 2021 was 20.6% for conventional retail banks, 17.1% for conventional wholesale banks, 21.2% for Islamic retail banks, and 15.8% for Islamic wholesale banks.
These indicators are consistent with the return of activity to all economic sectors in the Kingdom, and demonstrate the financial sector’s stability and capacity to serve the national economy.
The Chairman and members of the Board of Directors expressed their thanks and appreciation to the Kingdom’s leadership for their support to the CBB and the efforts and measures taken to contain the repercussions of covid-19, including the Economic Recovery Plan which contributed to the return of normal activities to all sectors of the economy.
The Board also expressed its appreciation for the efforts of the banking sector over the past year by providing support and assistance to reduce debt burdens on individuals and companies. The Board concluded its meeting by expressing its appreciation to CBB staff for their efforts during this year, which contributed to maintaining financial stability and developing the financial sector.
