Central Bank of Bahrain: Banking Assets Rise 1.2% in the Quarter to $253.5 Billion

By The Edge Research Team

The Takeaway: Bahrain’s banking system assets rose 1.2% in the third quarter to $253.52 billion, according to the Central Bank of Bahrain’s statistical bulletin for September. M3, the broadest money measure, grew 13.1% in a year, and local deposits at retail banks rose 12.9%. Retail banks’ loans to residents grew 7.1% on the year, and the number of banks and financial institutions rose to 379.

Bahrain’s banks do more of their business at home: the banking system’s domestic assets grew 7.8% in a year to September and now make up 41.0% of its balance sheet.

For Bahrain’s banks and savers, the bulletin shows money and deposits growing faster than lending. Retail banks’ local deposits rose 12.9% in a year, against 7.1% for their loans to residents. In The Edge’s reading, that gives retail banks a wider deposit base behind their home lending than a year ago: loans to residents were equivalent to 76.7% of their total local deposits in September, down from 80.8% a year earlier.

Banking system assets climb to $253.52 billion

The aggregated balance sheet of Bahrain’s retail and wholesale banks, which excludes the Central Bank of Bahrain itself, reached $253.52 billion at the end of September. That is $2.95 billion more than at the end of June.

September alone added $6.50 billion, or 2.6%. The August level of $247.0 billion was set out here on 30 October.

Domestic assets rose 1.1% in the quarter to $103.92 billion. Claims on private non-banks, the largest domestic item, grew 8.5% in a year to $41.36 billion, their highest monthly level in the bulletin’s table.

Retail banks’ balance sheet grew 7.5% in a year to $125.94 billion. Wholesale banks stood at $127.59 billion, up 1.1% in the quarter.

Islamic banks, which the bank shows as a separate sector inside the total, stood at $68.56 billion, 3.0% above a year earlier. Total equity of the banking system rose 1.2% in the quarter to $31.52 billion. The bank’s indicators table shows it at 12.4% of total liabilities.

Against September 2025, total assets were $2.90 billion, or 1.1%, lower. Foreign assets fell 6.5% over the year, and the wholesale banks’ balance sheet 8.4%.

Banking system balance sheet (in $ billions)

End of period, rounded from the bank’s figures in $ millions. Retail and wholesale banks, excluding the Central Bank of Bahrain; their balance sheets sum to the total. Islamic banks are shown as a separate sector and are not added to the total.

M3 money supply reaches BD 18.37 billion as government deposits rise

M3, the broadest measure of money supply, reached BD 18.37 billion at the end of September, 13.1% more than a year earlier. That is the highest figure in the bulletin’s money supply table, which gives year-end levels from 2016, quarter-end levels from the end of 2024 and monthly levels from September 2025.

Government deposits drove September’s gain. M3 rose BD 518.5 million in the month, and deposits of the central government and the Social Insurance System supplied BD 505.7 million of it.

Those deposits reached BD 3.18 billion, also the highest level in the table. M3 is M2 plus these government deposits.

Narrow money, M1, counts currency outside banks and demand deposits in dinars; it grew 12.1% over the year. M2, which the bank’s table labels broad money, adds demand deposits in foreign currencies and time and savings deposits.

M2 edged up 0.1% in September to BD 15.19 billion. Over the year it grew 8.2%.

Across the quarter, M2 was 1.7% lower than at the end of June, and M1 was 2.2% lower. Time and savings deposits eased 0.8% in the quarter to BD 11.39 billion.

Money supply (in BD billions)

End of month, rounded from the bank’s figures in BD millions. Government deposits are those of the central government and the Social Insurance System.

Retail deposits grow 12.9% and lending to residents 7.1%

Retail banks’ total local deposits, in dinars and foreign currencies, reached BD 17.81 billion at the end of the third quarter. They grew BD 224.1 million in the quarter and BD 2.03 billion in a year.

Outstanding loans to residents rose 0.8% in the quarter to BD 13.65 billion. Over the year they grew BD 906.6 million.

The bank prints local deposits at 96.7% of GDP, up from 85.7% a year earlier. Loans to residents stand at 74.2% of GDP, against 69.2%.

The board’s review of the August figures, set out here on 30 October, used retail banks’ private deposits. That is a narrower measure than the total local deposits shown here.

Borrowing costs for companies rose in the quarter. The average rate on business loans, excluding overdrafts, reached 5.98% against 4.57% in the second quarter. That is still below the 6.05% of a year earlier.

Personal loans averaged 5.10%. The average rate on 6 to 12 month deposits eased to 2.47% from 2.63%.

Government securities reach BD 20.12 billion, and licensed institutions rise to 379

Public debt instruments, which the bank measures as the government’s development bonds, treasury bills and Islamic securities, stood at BD 20.12 billion at the end of September. That is BD 177.0 million more than in June and 8.5% more than a year earlier.

The bank prints the ratio of these instruments to GDP at 109.3%, against 108.3% at the end of June.

Development bonds made up 60.5% of the total, at BD 12.17 billion. New issues of BD 200 million came in each of July and August, and none matured in the quarter.

Treasury bills outstanding stayed at BD 2.11 billion, with new issues matching maturities. Islamic leasing securities declined to BD 5.69 billion. In the quarter, BD 463.0 million of them matured against BD 240.0 million of new issues.

Against August, the total was BD 158.0 million lower. The average three-month treasury bill rate rose to 5.33% in the third quarter from 5.26% in the second.

The 12-month bill rate averaged 5.56%. The average rate on long-term development bonds reached 7.00%.

The number of banks and financial institutions rose to 379 at the end of September, from 377 in June. Ten new licences were issued in the quarter, the most in any of the five quarters the bulletin shows.

Figures are from the Central Bank of Bahrain’s Statistical Bulletin for September 2026, published in November 2026 (its banking, financial and monetary indicators and tables 3, 12 and 13); ratios to GDP are as the bank prints them and, by The Edge’s calculation, divide every quarter shown by the same GDP figure of about BD 18.41 billion, so they move only with the stocks; percentages and comparisons not attributed to a source are The Edge’s calculations.

Sources: Central Bank of Bahrain, The Edge.

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