Bahraini banks have received a clean bill of health by the International Monetary Fund, while rating agency Moody’s raised its outlook for the sector, as banks in the kingdom emerge from a period of consolidation, Reuters has reported. “The banking sector is in good health. The capitalisation of the banking system is high on average, around 18% for retail banks and above 22% for wholesale banks,” the IMF said last week after it concluded a consultation mission. Moody’s also changed its outlook on Bahrain’s banking system to stable from negative, saying it expects banks’ capital metrics to remain broadly stable; they had an aggregate Tier 1 capital ratio of around 14.5% at the end of December, which the credit ratings agency said was enough to absorb losses under its scenario and stress-testing analyses.
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