Bahrain - An increase in money supply and transactions as shown by Central Bank of Bahrain (CBB) data reflects a pick-up in economic activity during the first eight months of the year.

Money supply in its broad sense, (M3), totalled BD15.8 billion at the end of August 2023, an increase of 3.8 per cent compared to the level as of end-August 2022, the regulator said in a statement after its third board of directors meeting for the year 2023.

As for retail banks, total private deposits increased to BD13.9bn at the end of August 2023, an increase of 3.1pc compared to end-August 2022.

Chaired by Hassan Al Jalahma, the board reviewed key monetary and banking developments for the period till end-August 2023, the CBB’s financial performance report, developments in the financial sector during the third quarter of 2023, and progress made regarding the Financial Services Sector Development Strategy, noting that the outstanding balance of total loans and credit facilities extended to resident economic sectors increased to BD11.6bn as of end-August 2023, an increase of 1.8pc compared to same period last year, with the business sector accounting for 43.2pc and the personal sector at 50.9pc of total loans and credit facilities.

The balance sheet of the banking system (retail banks and wholesale sector banks) increased to $224.7bn at the end of August 2023, an increase of 0.1pc compared to the end of August 2022.

Point of sale (POS) data indicated an increase in the number of transactions during the first eight months of 2023 (January-August 2023), totalling 119.4 million transactions (77.6pc of which were contactless), an increase of 14.6pc compared to the same period in 2022.

The total value of POS transactions in the kingdom during January-August 2023 totalled BD2.7bn, (50.9pc of them contactless), an increase of 7.6pc compared to the same period in 2022.

Review of the data shows the banking sector maintained a high level of capital adequacy and liquidity, as the capital adequacy ratio of the banking sector amounted to 19.2pc in Q2-2023.

The capital adequacy ratio was 21.7pc for conventional retail banks, 17pc for conventional wholesale banks, 21.4pc for Islamic retail banks, and 17.2pc for Islamic wholesale banks.

The number of registered collective investment undertakings (CIUs) was 1,667 as of end-September 2023.

The net asset value (NAV) of the CIUs decreased from $11.8bn in Q2-2022 to $10.7bn in Q2-2023, reflecting a drop of 9.3pc.

Moreover, the NAV of overseas domiciled CIUs decreased from $6.4bn in Q2 2022 to $6.3bn in Q2 2023, down 1.6pc.

On the other hand, the NAV of the Sharia compliant CIUs increased 16.7pc from $1.2bn in Q2 2022 to $1.4bn in Q2-2023.

As for the insurance sector, gross premiums (conventional and Takaful) generated in the domestic market amounted to BD151.5m in the first six months of 2023, growing around 3.1pc, with general insurance business (including medical insurance business) contributing to around 90pc of gross written premiums.

Total gross premiums of medical insurance jumped 12pc from BD46.78m in January-June 2022 to BD52.31m in the same period of 2023.

Medical insurance was the largest in terms of total gross premiums, grabbing around 35pc share of the total gross premiums written in the six-month period.

Total gross premiums in motor insurance rose by 8pc to BD38.89m in the six-month period compared to BD36.06m in the same period of 2022.

Motor insurance took the second largest share, accounting for around 26pc of the total premiums written.

Life insurance and savings products (long-term insurance) generated gross premiums of BD15.90m in the six months compared to BD23.32m in the same period of 2022.

The long-term insurance premiums represented 10pc of total gross premiums written in the first half of 2023.

The meeting also saw the board members extending their gratitude and appreciation to outgoing Governor Rasheed Al Maraj for his initiatives and accomplishments during his tenure.

Furthermore, the board congratulated Khalid Humaidan on being appointed as the new Governor with effect from February 2024.

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