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Tuesday, 24 November 2009 03:43 UAE time

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Bahrain's Ithmaar Bank to up BBK stake via Shamil swap

by This email address is being protected from spam bots, you need Javascript enabled to view it  on Monday, 01 December 2008
BAHRAINI CAPITAL: A recent view of the Gulf kingdom's capital Manama. (Getty Images)

Bahrain's Ithmaar Bank said on Monday it plans to increase its stake in Bank of Bahrain and Kuwait by swapping new BBK shares with its Shamil Bank, effectively merging the two lenders.

Islamic lender Ithmaar owns a 25.4 percent stake in retail bank BBK and fully owns Shamil Bank.

"Combining the core strengths of both banks, BBK and Shamil, will pool already significant resources and, in addition to the obvious competitive advantages and the subsequent economies of scale, it will also build a strong capital base capable of facing unforeseen market conditions, and respond to economic changes," Ithmaar said in a statement.

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It said the stake increase would take place through the share swap arrangement, under which Ithmaar would receive newly issued BBK shares in return for Shamil Bank. Ithmaar did not specify by how much it intends to increase its stake in BBK.

"At this stage it's still a proposal, it needs to get approved by shareholders first," a spokesman for Ithmaar Bank said.

The proposal still needs to be finalised by the board of directors of both Ithmaar Bank and BBK, before being discussed by shareholders, the statement said. (Reuters)

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