Cuts coming at Bahraini investment bank

18 May 2009

2 minute read

After posting a $5.7m loss for the first quarter of 2009, BMB Investment Bank looks set to reduce staff levels going forward.

For those who believed there were some green shoots of optimism surrounding the investment banking sector, BMB's results will come as a stark reminder that the downturn is still with us.

In Q1 2008, the bank posted a $4.4m profit, but this year's results - which the bank puts down to the "global economic downturn" - mean that it's reviewing its operations.

Wilson Benjamin, BMB's chairman, says the bank is "embarking on an ambitious plan to develop and expand our business franchise."

In spite of this assertion, immediate plans seem focused on reducing staff levels. Akbar A. Habib, chief executive officer at BMB said it was "currently assessing the sizing and structure of its staffing levels in order to bring about an optimum level of efficiency and effectiveness."

The results are in contrast to another Bahraini investment bank - Unicorn, which posted a $35m profit for 2008.

Majid Al-Sayed Bader Al-Refai, Unicorn's managing director and chief executive officer, said: "We remain guided, as always, by a clearly defined strategy, an unwavering focus on disciplined growth, a commitment to sound corporate governance and prudent risk management and sustained investment in people, research and technology."

AUTHORPaul Clarke

pr
prakano
24 May 2009
I feel there is a mixed feeling of the recession in Bahrain. It's mainly the fear factor that is playing in the economy of Bahrain because of what has happened in Dubai. I am not saying that recession is not here, but the scale is very low. I feel the Bahrain economy will have the ripple effects of recession not a major one that is being experienced by other countries. I feel banks should diversify from real estates and concentrate into other sectors as well. Also real estate development should be focussed on all sectors of the country. What is currently being done is only the high income group is being targeted while there is a very big, untapped market in the middle income groups in the terms of rent or buying. With only a population of only just above 1 million, how many high income individuals are there to buy a premium apartment or villa? I believe that the banks should get more realistic of what Bahrain can sustain in terms of investment as well as other sectors. Most of the banks in this country are only into real estate. You cannot expect to sustain by investing only in one sector.
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