Wave Of Consolidation Beginning


BMI View: We expect the number of mergers and acquisitions in Bahrain to increase from this year onward as consolidation in the financial services and insurance industries becomes a key trend. While this will strengthen growth in these sectors, escalating competition from the rest of the Gulf means that Bahrain will not regain its position as the region's leading financial centre.

We expect industry consolidation to be one of the key trends of the Bahraini economy over the rest of the decade. The historical fragmentation of several industries - most notably banking and insurance - has tended to hamper growth opportunities, particularly when combined with the constraints set by Bahrain's small population base. Over the past few years, new pressures have been added by the gradual erosion of Bahrain's regional competitive advantage in the financial services industry, on the back of the country's continuing political troubles and increasingly fierce competition from the rest of the Gulf Cooperation Council (GCC). These factors, added to the need for scale in order to keep up with regional rivals, will in our view prompt a rise in the number of Bahraini mergers and acquisitions (M&A) from this year onward.

Highly Fragmented Industries

Competing With Giants
GCC - Largest 20 Banks By Assets, USDbn

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This article is tagged to:
Sector: Country Risk
Geography: Bahrain