Even if expats leave, Bahrain's banking sector may be OK

The ongoing problems in Bahrain may have seen something of an exodus of expat bankers, but it's questionable whether this is creating any real problems for the industry.

Unlike the UAE, where the proportion of Emiratis working in financial services is relatively small, Bahrain's banking sector is predominantly staffed by locals.

In an interview with Arabian Business, Atif Abdulmalik CEO of Bahraini investment bank Arcapita said that the predominance of local talent in the banking sector will ensure institutions remain in the kingdom.

"If you go to any commercial bank in Bahrain, 90% of those working there are Bahrainis. I doubt it's even 5% in Dubai," he said.

There's been a lot of talk about how Dubai is benefiting from the problems in Bahrain. Some reports suggest it's just a matter of time before international banks in the kingdom shift their operations to Dubai, while many institutions gave their employees the opportunity to temporarily relocate during the height of the troubles.

Individuals have taken it upon themselves to escape Bahrain and seek work in the safe haven of the UAE.

So far, though, few institutions have taken the decision to upsticks. One example is Dutch asset manager Robecco, which is moving its regional headquarters (and 12 staff) to Dubai by year-end. But the banks with a significant presence in Bahrain - notably Standard Chartered and BNP Paribas - have reiterated their commitment to the kingdom.

Perhaps one of the reasons is that with such a high proportion of local employees, few have indicated a desire to leave.

"For all the talk of an exodus, few of our clients are reporting problems holding on to staff currently," says Rory Adamson, director of Bahrain-based financial services headhunter Azrek. "The vast majority of our candidates working in Bahrain are locals, and the banking sector doesn't rely on expats to fill senior positions, unlike the UAE."

Still, a local workforce is no guarantee of loyalty to Bahrain. Adamson says Bahraini bankers' reputation as a highly skilled and educated workforce means they're in demand elsewhere in the region.

What's more, new employment opportunities have been relatively thin on the ground over the last two years and the unrest in the kingdom has only dampened banks' appetite to recruit. Locals may therefore not feel forced out of Bahrain by the troubles, but rather a lack of career progression.

"It's no secret that a number of banks that expanded rapidly in Bahrain during the boom years have found themselves over-staffed more recently," says Adamson. "A lot of institutions are therefore still in belt-tightening mode."