Bahrain banks announce plans to merge

  • Share via facebook
  • Tweet this
  • Bookmark and Share

Bahrain's Al Salam Bank and BMI Bank, an affiliate of Oman's Bank Muscat, have announced plans to merge, a tie-up which would create the kingdom's third-largest bank by assets, the lenders said in a statement.

A committee has been created by the two banks to administer the merger process, which would create a bank with assets of around 1.7 billion dinars ($4.5 billion). The merger will involve a share swap, with the final ratio yet to be decided, a separate statement from Bank Muscat said.

The proposed merger, which has the assent of both boards but still needs shareholder and regulatory approval, is the latest example of consolidation in the Bahraini banking system.

Mergers among Bahraini lenders have been encouraged by the country's central bank, especially among smaller Islamic banks hit hard by a local real estate crisis and political uprisings in the tiny Island nation.

Previous attempts to consolidate in the Gulf Arab region's banking sector have been scuppered with shareholders unwilling to cede control except for sky-high valuations.

Al Salam Bank had previously tried to merge with Bahrain Islamic Bank (BIsB) but that deal collapsed in February 2012 over valuation disagreements.

National Bank of Bahrain and a local pension fund said in March it would buy a 51.6 percent stake in BIsB, and Capivest, Elaf Bank and Capital Management House completed a three-way merging in January.

"Consolidation was the only way forward for Bahraini banks to stay competitive and financially strong in the aftermath of the recent financial crisis and resulting economic downturn," said Al Salam and BMI in a joint statement on Thursday.

BMI Bank is 49 percent owned by Bank Muscat and talks will include what role the Omani lender will play in the new entity, according to one senior Bahraini banker, with a full exit a possible option.


Market Performance

Al Salam Bank - Bahrain
0.0 0.0 (%)
Join the Discussion

Disclaimer:The view expressed here by our readers are not necessarily shared by Arabian Business, its employees, sponsors or its advertisers.

Please post responsibly. Commenter Rules

  • No comments yet, be the first!

Enter the words above: Enter the numbers you hear:

All comments are subject to approval before appearing

Further reading

Features & Analysis
Coming to America

Coming to America

As Barack Obama seeks to rebalance the bloated US economy, the...

Should the Gulf introduce VAT?

Should the Gulf introduce VAT?

The GCC’s plans to bring in value-added tax were withdrawn as...

Why are some of the world's biggest banks leaving the UAE?

Why are some of the world's biggest banks leaving the UAE?

Large Western banks have been selling off their local assets...

Most Discussed
  • 17
    Nakheel PR: The toughest job in Dubai?

    You forgot to mention the sewage pit between JLT and Jumeirah Park and the terrible landscaping in Jumeirah Park The chain link fencing they want to install... more

    Monday, 30 March 2015 9:05 AM - An Emaar Fan
  • 14
    Dubai Int'l T1 is too congested, says Indian airline boss

    Question: All you people, criticizing my comment, do you work for Air India by any chance?

    Additionally, for all the whiners, I will provide you... more

    Tuesday, 31 March 2015 12:50 PM - Mosa
  • 9
    Post traumatic stress?

    I once had a Emirates Post employee hang up on me when I asked her to repeat something. That said, the worst is my management company, Kingfield Management... more

    Sunday, 29 March 2015 6:07 PM - Sarah