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Management Discussion and Analysis
Management Discussion and Analysis
// Management Discussion
and Analysis
On 01 January 2005, BMI Bank B.S.C (c),
previously BankMuscat International B.S.C
(c), (“the Bank”) was established as a locally
incorporated Full Commercial Bank (FCB),
registered and based in the Kingdom of Bahrain
and regulated by the Central Bank of Bahrain
(CBB). Under the revised license framework
of the CBB introduced in July 2006, the Bank
operates as a Conventional Retail Bank with
a retail banking network of nine (9) branches
and twenty nine (29) ATMs in Bahrain and
a branch in the State of Qatar (operating
under a license to offer wholesale and private
banking products and services, granted by the
Qatar Financial Centre Regulatory Authority).
Following approvals of the Bank’s shareholders
at their Extraordinary General Meeting held on
6th January 2008 and of the Central Bank of
Bahrain, the Bank changed its name to BMI
Bank B.S.C (c) effective 01 April 2008.
The Bank owns a 100% stake in
Diners Club Services W.L.L, which
is incorporated in Bahrain and
operates the Diners Club cards
franchise in Bahrain, Syria and
Yemen. The Bank also operates
and owns 50% of BMI Offshore
Bank in Seychelles and 50%
of Money on Demand Holdings
WLL (“Mode”), mobile banking
company incorporated in Bahrain.
Finally, BMI Bank has a 21.33%
stake in Gulf African Bank, an
Islamic bank in Kenya.
Composition of BMI Bank’s Board of Directors as listed on page #18 to #21 is as of 31 December
2010. Subsequent to this date, there has been a change in the composition of the Board of
Directors. For the latest list of Directors, kindly visit the Bank’s web site on bmibank.com.bh and
browse through the about BMI Bank section.
//The Bank’s
shareholders are:
BankMuscat (Oman) 49%,
Overseas Investments (Bahrain) 20%,
Royal Court Affairs (Oman) * 11%,
Istithmar World Capital (Dubai) ** 10%
Global Investment House (Kuwait) 0.1%
Financial Assets Bahrain W.L.L. 9.9%
*The Royal Court Affairs is part of
the Government of the Sultanate
of Oman
** Istithmar World Capital is
the investment arm of the
Government of Dubai
The Bank’s staff strength
increased to 356 people across
three countries at the end of 2010
from 328 people across three
countries at the end of 2009.
//Regional outlook
2009 was a difficult year for
the region as the full impact of
the global financial crisis was
felt by the GCC economies. The
banking sector was hit by the
default of two major groups in
Saudi Arabia, followed by the
restructuring announced by Dubai
World at the end of 2009. The
first half of 2010 continued to
feel the fallout of these events,
however recovery emerged as
oil demand rebounded thanks
to Asian emerging markets and
the financial sector stabilized.
The price of oil continued to
rise, by the end of 2010 it was
US$ 90 per barrel up from US$
70 per barrel. Growth in 2010
was constrained by weak credit
expansion, and by the fact that
some GCC countries had to
restrain output to support oil
prices. In 2010, economic growth
for the GCC group is projected to
be at 4.5% - a strong comeback
from the near zero in 2009. The
expectation for 2011 is 5%,
however Qatar is the primary
driver of this growth projecting to
record growth of around 15% in
both 2010 and 2011.
All GCC governments continued to
stimulate their economies as the
global economy started slowing in
the second quarter of 2010. The
recent political events in the North
African region (Tunisia, Egypt,
etc.) have impacted some of the
GCC countries, resulting in political
uncertainty in the region. These
uncertainties have resulted in the
price of oil going over the US$100
mark, however the long term
stability of the region is dependant
on the satisfactory resolution of
the underlying issues.
//Bahrain’s political and
economic outlook
Bahrain is widely regarded as
one of the most forward looking
countries in the region. Political
and economic reforms have
yielded significant progress in
recent years.
Bahrain’s well supervised financial
system provides the government
with a relatively deep and liquid
market for its securities and
enables the Kingdom to serve
as a regional financial centre.
Regional and international
institutions have been attracted
to the country mainly due
to Bahrain’s liberal economic
policies, geographic proximity to
36 // BMI Bank Annual Report 2010
BMI Bank Annual Report 2010 // 37