The Bahraini banking industry will not be affected by the default of The International Banking Corp, the Bahrain-based unit of Saudi Arabia's Ahmad Hamad Algosaibi & Brothers, a central bank official said.
"You are talking about a very small financial institution compared with the whole financial sector in Bahrain," Zakaria Hejres, a board member on the Central Bank of Bahrain, said in an interview yesterday.
"The whole issue is a Saudi issue," and "the central bank has taken necessary actions."
Standard and Poor's Ratings Services said on May 12 that it lowered its long and short-term counterparty credit ratings on TIBC to SD/SD, selective default, meaning payments may not be made on some obligations. TIBC has defaulted on some of its bank debt since the beginning of May, S&P said.
"By the nature of the case, it is limited to certain commercial families," said Hejres, who is also the deputy chief executive of the country's Economic Development Board.
Bahrain also yesterday started roadshows yesterday in Kuala Lumpur for its forthcoming, dollar-denominated, sukuk offer, one of the banks arranging the deal said yesterday.
Calyon, Deutsche Bank and HSBC Holdings are acting as joint-lead managers for the roadshows, with the transaction expected to materialise thereafter subject to market conditions.
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