U.S. Stocks vs. Bonds: Are Diverging Valuations Signaling a Shift? 
Bank of America Posts Strong Q4 2024 Results, Shares Rise 
Gold Prices Fall Amid Rate Jitters; Copper Steady as China Stimulus Eyed 
Gold Prices Slide as Rate Cut Prospects Diminish; Copper Gains on China Stimulus Hopes 
Mexico's Undervalued Equity Market Offers Long-Term Investment Potential 
Oil Prices Dip Slightly Amid Focus on Russian Sanctions and U.S. Inflation Data 
Geopolitical Shocks That Could Reshape Financial Markets in 2025 
S&P 500 Relies on Tech for Growth in Q4 2024, Says Barclays 
China's Refining Industry Faces Major Shakeup Amid Challenges 
US Futures Rise as Investors Eye Earnings, Inflation Data, and Wildfire Impacts 
UBS Projects Mixed Market Outlook for 2025 Amid Trump Policy Uncertainty 
Moldova Criticizes Russia Amid Transdniestria Energy Crisis 
2025 Market Outlook: Key January Events to Watch 
Indonesia Surprises Markets with Interest Rate Cut Amid Currency Pressure 
Urban studies: Doing research when every city is different 
European Stocks Rally on Chinese Growth and Mining Merger Speculation 
Moody's Investors Service has today changed the outlook for Bahrain's banking system to negative from stable, reflecting the rating agency's view that a slowdown in economic growth, resulting from the impact of lower oil prices, will weigh on the banks' funding and profitability over the coming 12-18 months.
Nevertheless, Moody's also considers that the banks' strong liquidity and capital buffers will continue to provide financial flexibility to adapt to these conditions.
Moody's new report, entitled "Banking System Outlook: Bahrain", is available on www.moodys.com. Moody's subscribers can access this report via the link provided at the end of this press release.
Moody's expects slower economic growth of 2.7% in 2015 (from 4.5% in 2014) in Bahrain (Baa3 negative), owing to the impact of lower oil prices and associated lower government revenues and spending, which will dampen operating conditions and weigh modestly on banks' funding and profitability.
At the same time, the banking system's credit profile will remain closely linked to the weakening fiscal position of the government, as direct holdings of government securities and loans, which currently represent over 2x the banks' equity, are likely to increase further, says Moody's.
However, financial assistance from other Gulf countries and fairly resilient growth expected in 2015 for Bahrain's relatively diversified non-oil economy will help soften the impact of lower oil prices and moderate the risk of any severe deterioration in the banks' performances.
In this context, Moody's forecasts a modest increase in the formation of new non-performing loans, although reported NPL ratios should remain broadly stable as a result of the banks' ongoing initiatives to recover and write-off legacy problem loans.
The rating agency also notes that Bahrain's banks will maintain strong liquidity and capital buffers, which will provide them with financial flexibility to adapt to the impact of lower oil prices, says Moody's.
