News Column

'We assure you of our total impartiality'

May 27, 2014

As you know, the chairman of the Bahrain Association of Banks wrote last week to lay out the facts regarding the business environment in which banks operate in Bahrain after a front-page article appeared last Monday (GDN, May 19), questioning their lending policies, especially as regards the spread between deposit and loan rates.

As he pointed out in that letter, the Moody's Bahrain Banking System Outlook Report dated March 2014 states: "Intense competition in Bahrain is keeping lending rates low and deposit rates high. At 2.3 per cent, Bahrain banks' net interest margin continues to be among the lowest in the GCC. Profitability of Bahraini banks is weaker than that of GCC peers".

This clearly demonstrates the actual position of Bahraini banks vis--vis other banks in the region.

It has taken almost one week to print that letter, and then it was buried in the letters page whilst another long article appeared on Pages 4 and 5 (GDN, May 25) with statements by various individuals and three consumers - but nothing from the banking community.

The reporting on this issue is biased and incomplete as there are no hard facts to support allegations such as " they compete by raising rates".

In fact, rates have declined, fees and charges are clearly listed in Arabic and English, and the loan agreements are in both languages so that the banking customer can understand and agree to them.

In addition, the one suggestion of extending the term of a loan to reduce monthly payments means that the consumer remains indebted longer and pays back a larger amount, which is not in the best interests of the individual and society.

The reporter should have ensured that the point of view of banks be carried in exactly the same way he has portrayed only one side in both articles.

No-one at the Association was contacted prior to running both articles or waited for a statement from the Central Bank of Bahrain. In the rush to sensationalise this issue that was not done, and thus, did not provide its readers a fair, balanced and factual report on this issue.

As a leading newspaper in Bahrain, unbiased journalism entails that both parties should be able to put forward their views in the same manner and at the same time.

Robert Ainey

Chief executive, Bahrain Association

of Banks

EDITOR'S NOTE: Dear Mr Ainey, our article did contain comments from Bahrain Association of Banks chairman Abdul Razak Al Qassim. However, no one from the Central Bank, which was allocated a monitoring role in the Cabinet announcement on interest rates, was available for comment when contacted by the GDN.

However, a full report about banks and their customers was published over two broadsheet pages of Akhbar Al Khaleej, our sister paper, on the same day, giving full details of a meeting with both the Central Bank Governor and the chairman of the Association. Their views were highlighted.

We can assure you that our neutrality and impartiality are crystal clear. The reality is that you appear not to have been informed by colleagues about what was published in the Arabic newspaper.

Also, for you to complain that we have not given prominence to your letter is unfair. Our letters pages are among the most important in the newspaper. They are read daily by the highest authority in this country, from whom we receive constant feedback.

Furthermore, we had intended to publish that particular letter on Friday, but delayed it until Sunday at YOUR request.

You as a chief executive ought to read or ask for translations of what appears in the Arabic Press before accusing us of shortcomings.

For more stories on investments and markets, please see HispanicBusiness' Finance Channel

Source: Gulf Daily News (Bahrain)

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