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Thu 17 Apr 2014 12:36 PM

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Shares in Bahrain's Ahli United Bank rise on news of potential merger

The bank is reportedly evaluating a sale or a merger with a rival bank in a potential $5bn deal

Shares in Bahrain's Ahli United Bank rise on news of potential merger
AUB headquarters, Bahrain

Shares in Ahli United Bank (AUB), Bahrain's biggest
lender, rise after several bankers familiar with the situation tell Reuters
that it is evaluating a sale or a merger with a rival bank.

Shares in the bank listed on the Bahrain stock
exchange jump 3.2 percent; the shares which are cross-listed in Kuwait are up
2.7 percent.

Quoting several bankers familiar with the
situation, Reuters reported on Wednesday that the bank was evaluating a sale or
a merger with a rival bank in a potential $5bn deal, a transaction which would
be one of the largest-ever banking M&A deals in the Middle East.

The move helps lift Bahrain's index .BAX> 0.7
percent to a weekly high of 1,390 points.

Sources provided no details on the potential merger
or sale of AUB and the bank itself said on Thursday it could not comment, but
the report suggests the possibility of consolidation in the Bahraini banking
sector that could benefit the whole industry. The central bank has been
encouraging mergers in the sector.

Reacting to another banking deal, shares in HSBC
Bank Oman lead gains on the Muscat bourse, rising 2.8 percent after the bank
said on Wednesday it had agreed to sell its Indian business to Qatar's Doha
Bank for an undisclosed sum. Doha Bank is up 0.3 percent.

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