3 islamic banks approve merger in Bahrain

Three Bahrain-based Islamic investment banks - Capivest, Elaf Bank and Capital Management House   have announced their approval to merge, after an extraordinary general meetings of the three banks approved the transaction. The merger will be effective after obtaining the final approval of the Central Bank of Bahrain and the Ministry of Industry and Commerce, a statement said. Once implemented, the newly created entity will have shareholders  equity of almost $350 million and assets in excess of $400 million. The transaction is the first three- way merger to take place in Bahrain. Vice Chairman of Elaf Bank Isa Habib said in comments: \"the aim of this merger is to establish a strong banking institution that is able to compete solidly in a changing market.\" \"The merger will bring instant diversification of assets and revenues. Also, the bank will be able to capture larger projects and will enable it to diversify its capital sources. This is in line with the government of Bahrain\'s efforts to enhance the banking sector and reinforce the Kingdom s position as a regional and international financial hub,\" he added. For his part, Chief Executive Officer of Capivest Mohammed Abdulmalik said that the three banks will gain numerous benefits from the merger; in particular, the merged bank will have a strong balance sheet from day one which will create a positive impact on Bahrian\'s dynamic banking sector. In addition to that, he added, the merger shall enable the new entity to unify its strategy to provide innovative and targeted services to clients. Khalid Najibi, Managing Director of Capital Management House, said \"the three banks have significant cumulative experience in financial services and each have particular niche strengths which when combined makes the whole greater than the sum of its parts. This fusion of competitive advantages in various markets makes us all excited and motivated to complete this merger and will work in the near future to announce the new brand identity of the bank which will reflect our client focus and future vision. We look forward to working side by side to achieve our shared goals.\" The three banks, Capivest, Elaf Bank and Capital Management House were advised by Kuwait Finance House Bahrain as the transaction adviser, Trowers and Hamlins as legal counsel and Deloitte as independent valuer. (QNA)