Increased provisioning for bad loans and a decline in income from investments have led Bahrain Islamic Bank into a quarterly loss.
Bahrain’s biggest Islamic retail bank by market value said on Wednesday provisions for impairments in the third quarter increased more than threefold to 2 million Bahraini dinars ($5.31 million) from 600,000 dinars in the same period last year.
The bank’s net loss for the three months ended Sept. 30 was 1.36 million dinars.
“Islamic banks in Bahrain are relatively more vulnerable compared to the conventional banks, and we could see instances of losses,” said Suleman Soorani, banking analyst at Sico Investment Bank.
“However it is very hard to make predictions because balance sheets for Islamic banks are very non-transparent. The exposure of Islamic banks to the real estate sector also poses a risk, and I think the central bank will continue to monitor the developments in Islamic banks closely.”