Bahrain’s Al Salam Bank praised by KPMG for toping key performance indicators

The bank secured the highest reduction in non-performing financing by any listed bank in GCC

By Rahul Vaimal, Associate Editor
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According to a report by KPMG, Al Salam Bank-Bahrain (Al Salam Bank) has attained the highest reduction in non-performing financing (NPF) amongst fifty-five GCC listed banks in 2019.

With a strong standing of 20.9 percent, the Bank also listed sixth in the region for Capital Adequacy Ratio (CAR). This makes Al Salam Bank the only Islamic bank from Bahrain to make the regional list of top 10 banks for a strong CAR and a marked reduction in non-performing financing, which fell by 3.3 percent.

Rafik Nayed
Group CEO – Al Salam Bank

“We have refined and refocused our strategy towards core business activities and the development and enhancement of revenue streams,” Mr. Nayed said. “Ultimately, Al Salam Bank’s impressive growth in CAR and the commendable reduction in NPFs is owed to our robust risk management culture coupled with the efficient management of our financing portfolio and balance sheet. We have grown these by 30% and 19% respectively, through our consistent and unwavering pursuit of high-quality assets offering superior risk-adjusted returns.”

KPMG’s latest GCC Listed Banks’ Results Report which features these rankings, examined the financial results of fifty-five listed commercial banks from each GCC country throughout 2019. The strength of Al Salam Bank’s achievements were highlighted as banks across the entire region posted impressive results, reflecting the continued resilience of the GCC banking sector.

The report records that the region’s positive results were linked with an enhanced focus on digitization, which has succeeded in banks moving toward a more innovative, technology-driven approach: “It is clear that banks that have been, and will continue to be, more nimble, agile and responsive to the digital agenda, will succeed in the long term. This has become even more apparent in the current crisis where branches are closed, face-to-face contact is limited, and the demand for digital banking channels has soared,” wrote Omar Mahmood, KPMG Head of Finance for the Middle East and South Asia region, and Reyaz Mihular, KPMG Chairman for the Middle East and South Asia region.

Al Salam Bank, with its often-pioneering, tech-focused initiatives, has come to be known as one of the key institutions driving the digitization of financial services – both Islamic and global – in Bahrain. The Kingdom is a regional leader in this regard and has the region’s oldest and most established banking sector. Al Salam Bank is continuing the successful roll-out of its three-year strategy, focused on giving customers a choice of innovative Shari’a-compliant banking solutions, including a virtual branch and an onboarding app that allows clients to open their accounts within minutes.

Mr. Nayed added: “We are pleased that the KPMG report highlighted the importance of continued customer focus through innovation – one of its key predictions for 2020 – and noted that the banks that will succeed in an increasingly digital and post-COVID world are those that are agile, flexible and willing to transform their business models. At Al Salam Bank we pride ourselves on our customer-centric, pioneering and innovative approach, the results of which have been reflected in our performance.”

US-based finance magazine Global Finance recognized these initiatives by naming Al Salam Bank the best Islamic Bank in Bahrain for the second year in a row. In awarding the title, the publication pointed to the Bank’s wide range of cutting-edge products, strong balance sheet and a growing asset base.

The KPMG report can be viewed at