The fact that Bahrain ended 2009 with more financial services jobs than it started with has been heralded as a triumph in the face of the global financial crisis. However, the raw statistics may not be truly representative of the situation in the kingdom currently.

Figures from the Central Bank of Bahrain show that there were 14,137 people employed in Bahrain’s financial sector at the end of last year – a rise of 1.5% on 2008.

However, the majority of this can be attributed to the 851 new jobs outside of banking – in areas such as insurance, investment advisory and capital markets broking firms.

The banking sector meanwhile lost over 500 roles, suggesting the redundancy announcements at Investcorp and Gulf International Bank were merely the tip of the iceberg in 2009.

Sadly, this year hasn’t started particularly well for the Bahrain’s banking sector either – local investment bank Gulf Finance House has admitted laying off 35 staff since year-end, as it looks to reduce costs by up to 45% in 2010. Manama-based Islamic investment bank Arcapita has also cut staff numbers by 15% in February.

Rory Adamson, director of Bahrain financial headhunter Azrek, says: “Bahraini investment banks have largely started 2010 the same way they ended 2009 – focusing on cutting costs. We’re seeing few signs of hiring at the moment.”

Redundancies are a sensitive issue in Bahrain – particularly when they involve local candidates – which is why the majority of them go unannounced. You only have to look the outrage expressed at GIB’s lay offs last year (which only affected 59 staff) to see evidence of this.

“It’s not a completely barren recruitment market in Bahrain,” adds Peter Jones, director of recruiters MRK Consulting. “However, we’re seeing individual roles coming to market – no firms are talking in terms of hiring whole teams.”