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 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.
