The Boards of Directors of Bahraini retail and commercial banking institution, BMI Bank B.S.C. (c), and Al-Salam Bank-Bahrain B.S.C. (ASBB), an Islamic Bank incorporated in Bahrain and engaged in retail banking, announced their in principle agreement to proceed with discussions to merge the two Banks to create the third largest Bank in Bahrain.
The Chairman of BMI Bank Sheikh Khalid bin Mustahail Al Mashani and the Chairperson of ASBB, H.H. Shaikha Hessa bint Khalifa bin Hamad Al Khalifa in a joint statement said that 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.
The new entity will benefit from a collective pool of resources both in terms of Management talent, customer base as well as superior products and services in addition to a strengthened delivery network. This will also create a stronger player in the market place across core business including retail, wholesale, SME, private and investment banking and wealth management.
The new entity would create the third largest bank in Bahrain by assets and will have a significantly higher underwriting capacity with total assets of approximately BD 1.7 billion and shareholders’ equity of approximately BD293 million. The CEO’s of the two Banks Jamal Al-Hazeem and Yousif Taqi said that the merger would enable the new entity to offer a wider range of unique and innovative financial products and services to their respective customer base. The new entity would become a strong player within the region and would significantly improve shareholder value through enhancement of revenue and rationalization of costs.
The Boards of Directors of the two Banks have agreed in principle in favor of a merger, subject to obtaining the respective shareholder’s approval and seeking the necessary regulatory consents. The two Banks have created a committee to finalize the details and mechanics of the merger.
BMI Bank currently operates in Bahrain through a network of 10 branches and 28 ATM’s whilst ASBB operates in Bahrain through a network of 10 branches and 20 ATMs.