(Adds Iran link, context, other details of two companies)
MANAMA, April 30 (Reuters) – Bahrain’s central bank said on
Thursday it had placed two Iran-linked companies, Future Bank
and Iran Insurance Co, into administration to protect the rights
of depositors and policyholders.
In a brief statement, the central bank did not elaborate on
why it took the action or give any information about the two
It said it wished “to reassure both the local and
international financial community that this measure is an
isolated incident and will not impact any other bank or
insurance company in the kingdom.
“Indeed Bahrain’s banking and insurance sectors remain
sound, well-capitalised, well-regulated and continue to develop
and grow with confidence.”
Calls to the two companies offices in Bahrain on Thursday
evening were not answered.
Future Bank, based in Manama, is a commercial bank which was
founded in 2004 as a joint venture between two Iranian banks –
Bank Saderat and Bank Melli – and Bahrain’s Ahli United Bank
, according to its website.
Its assets totalled 597.2 million dinars ($1.58 billion)
last year, when it made a profit of 17.9 million dinars,
according to its latest financial statement.
Iran Insurance Co is the Bahrain branch of an Iranian
government-owned insurer, according to its website, which said
the parent company had a network of branches in Iran and paid-up
capital of $236 million.
In the last three years, Iranian institutions have largely
been frozen out of the global financial system by international
sanctions imposed over Iran’s disputed nuclear programme. It was
not immediately known whether the action against the two
companies in Bahrain was related to the sanctions.
Bahrain has been caught up in a region-wide tussle for
influence between Sunni Muslim Saudi Arabia and Shi’ite Iran.
Bahraini authorities have blamed Shi’ite groups for social
unrest and accused them of having links to Iran.
The Bahraini banking system has been hurt by the unrest and
by low oil prices; bank lending to the private sector has been
shrinking. In an effort to strengthen the banking industry, the
central bank has been encouraging mergers and consolidation for
Bahrain’s central bank governor Rasheed al-Maraj said in
February there were too many banks in Bahrain, saying: “I need
to see stronger and bigger banks.”