Bahraini Finance Sector Update

The article presented a report on Bahrain's financial situation through the end of 2025, highlighting that the financial sector remains a key driver of the economy, contributing 17.8% to the gross domestic product (GDP). This is linked to the development of banking performance, the capital market, and digital transformation. The report demonstrated the strength and stability of banking liquidity, with positive indicators regarding asset quality. Bank assets increased to $254.4 billion, while Islamic assets grew to account for 26.4% of the sector. It also pointed to an increase in the deposit-to-GDP ratio to 62% and a decline in non-performing loans to 2.6%. With credit increasingly directed toward households and the government, there is a need to focus more on small and medium-sized enterprises to foster sustainable growth. The report emphasized the importance of leveraging digital capabilities to enhance financing and expand the market base, while also highlighting the necessity of transforming the financial system to include more productive and investment activities to ensure the sustainability and diversification of economic growth.

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