Swiss Banking Corporation (SBC) is planning to close its offshore banking unit (OBU) in Bahrain at the end of this year as part of a reorganisation of its global operations, a bank source says.
The closure does not indicate that SBC has changed its attitude towards Bahrain as a financial centre, the source says, but rather that the business done by the OBU can now be done out of one of its five global business centres in major cities.
SBC will keep its representative office in Manama, and is opening another in Dubai to focus on business in the northern part of the UAE, Oman and Pakistan. SBC also has an office in Abu Dhabi.
Most OBUs were set up in Bahrain to channel the outward flow of Gulf oil money that began in the 1970s. Their numbers have fallen from a peak in the mid-1980s, partly because oil prices have been relatively weak for most of the past decade and partly because better technology means that international banks can do more business from their main areas of operation.
However, the island remains attractive for specialised investment banks. A senior member of the Saudi royal family and a group of international investors are setting up a new bank to buy into companies in the Asia- Pacific region (MEED 18:10:96).