Bahrain has been an important financial center since the 1970s and, at 17 percent of gross domestic product, financial services is the kingdom’s second-largest sector after oil. “It is a historic hub,” said Jean-Christophe Durand, CEO of the National Bank of Bahrain (NBB): “By which I mean pioneering. Bahrain started with a vision to turn the kingdom into the region’s financial bridge to the world. Today, some of our neighbors also have financial centers, but what still differentiates Bahrain’s is innovation. The country is creating a different type of banking industry.”
Established as Bahrain’s first bank in 1957, NBB is the kingdom’s leading provider of retail and commercial banking services, and is at the forefront of the sector’s advance. Listed on the kingdom’s stock exchange, about 45 percent of NBB is owned by private and institutional shareholders, while the rest is held by Bahrain’s sovereign fund and Social Insurance Organisation.
The bank is currently modernizing and diversifying — a process that is producing sustained growth: in 2018, its net profits grew by 14.8 percent to a record $186 million. Durand believes a significant proportion of NBB’s continued success is due to Bahrain’s strengths as a financial hub: “We have a good regulator, the Central Bank of Bahrain, which is very much aware of the sector’s transformation, and there is a close relationship between the regulator, government and financial institutions. A further major strength is the caliber of the kingdom’s experienced banking talent. It is second to none in the region.”
One way NBB is looking to diversify is through strategic expansion in regional markets. “In the near term, our first objective is to grow our presence in Saudi Arabia and the United Arab Emirates. As a Bahraini bank, we have a real advantage in those countries leveraging long-held relationships between us. We have always been a strong local bank and will now replicate our model, and use our infrastructure and teams to succeed in other markets,” said the CEO.
NBB is also open to expanding by non-organic means, he stated, “I see potential in acquisitions and partnerships with complementary businesses in countries or product areas where we need to acquire knowledge.” Another of NBB’s diversification strategies is to embrace technologies by digitalizing its internal processes and introducing more digital products, services and platforms.
As part of its focus on banking technologies, NBB became a founding partner of the kingdom’s fintech hub, Bahrain FinTech Bay. This partnership underscores NBB’s commitment to innovation and to advancing its products and services in areas such as payments, transfers, electronic know-your-customer and open-banking systems that it can adapt to suit its clients in collaboration with developers of these technologies. “This will help us attract new young professionals and entrepreneurs and further enhance our service quality to our existing client base,” explained the CEO.