Why is National Bank of Bahrain Borrowing $700 Million?
2021-09-29 - 8:27 p
Bahrain Mirror (Exclusive): The National bank of Bahrain is reportedly planning to borrow about USD700 million or its equivalent. The Bank has not issued any explanation for the motives behind the borrowing.
The Bank invited shareholders to hold a meeting of the General Assembly on October 13th to obtain the necessary approvals to authorize the Board of Directors to borrow and issue any debt bonds or financing instruments within two years of the date of the General Assembly resolution.
The bank did not give further clarification on the borrowing process. It was not revealed whether the bank is planning to secure the liquidity reserve or wants to pay its financial obligations.
The Central Bank of Bahrain obliges financial institutions to deposit liquidity reserves of up to 3%.
The bank reduced liquidity (March 2020) in a measure to facilitate the banks’ work, directing banks to offer six-month installment delays.
The loan comes nearly a year after the bank participated in financial facilitations to support McLaren UK.
The National Bank of Bahrain granted McLaren a loan of 150 million pounds ($185), pumping the amount through a capital offering.
Mumtalakat, the investment arm of the Government of Bahrain, owns 44% of the bank.
According to information at the time, the decision to lend to McLaren came from outside the bank’s administration. Bahrain owns 59% of the shares of the luxury sports car manufacturer.
Analysts believe Bahrain's purchase of this share stake in the car company is related to Crown Prince Salman bin Hamad Al Khalifa's interest in fast car racing.
McLaren has one of the big teams who compete in formula one car tournaments.
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