Moody's Investors Service maintained its negative outlook on Bahrain's banking system, according to a report.
The outlook reflected the rating agency's expectation that operating conditions for the country's banks will continue to deteriorate over the next 12-18 months.
Moody's expected economic growth to slow to 2.2% in 2016 from 2.9% in 2015 as the sharp drop in oil prices since 2014 continues to take its toll.
Oil prices decline will also likely constrain government spending and weaken consumer and investor confidence, the report said.
"We expect low oil prices and reduced government spending to weigh on Bahraini banks," according to Christos Theofilou, an assistant vice president -- analyst at Moody's.
"However, this will likely be partly mitigated by the non-oil economy's diversity and a Gulf Cooperation Council (GCC)-funded economic support package."
