Bahrain Islamic Bank, Al Salam eye $4.5bn merger

A merger of the two lenders would create Bahrain's largest Islamic bank
Bahrain Islamic Bank, Al Salam eye $4.5bn merger
Merger of the two lenders would create Bahrains largest Islamic bank
By Reuters
Wed 10 Aug 2011 10:18 AM

Bahrain Islamic Bank and Al Salam Bank are in merger talks
to form the Gulf Arab state's largest Islamic lender with assets of BD1.7bn ($4.5bn),
according to a statement on the Bahraini bourse website.

"The two boards of directors ... stated that
consolidation is the way forward for local banks in general and Islamic banks
in particular in the aftermath of financial crisis and economic downturn and
greater competitive banking environment in the region," the statement

"The combined entity would have total assets of BD1.7bn
and shareholders' equity of BD337m. The combined entity would be the third
largest domestic bank in terms of total assets and the second largest in terms
of equity," the statement added.

Bahrain's central bank has said lenders in the island
kingdom have not been adversely impacted by protests earlier this year. But
bankers and analysts have said banks would be hit as international lenders
could curb financing, and tourism and retail firms might be forced into debt

In March, Bahrain Islamic Bank postponed a planned $143m rights
issue, citing market conditions.

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