Dubai • National Bank of Bahrain BSC plans to increase its stake in Bahrain Islamic Bank BSC to 43.5% as the Gulf state’s second-biggest lender by market value seeks to boost growth.
The bank started talks to buy all of Islamic Development Bank’s 14.4% stake in the lender that would increase its holding from 29.1%, it said in a statement to the Bahrain stock exchange.
State-controlled National Bank of Bahrain has signed a letter of intent for the talks and appointed advisors to help with due diligence.
Lower oil prices are forcing Gulf lenders to consolidate their operations to become more competitive in a crowded market.
Bahrain’s Ahli United Bank BSC is in talks to merge with Kuwait Finance House KSCP to create one of the region’s largest Islamic banks with about US$92 billion (RM378.12 billion) of assets.
National Bank of Bahrain CEO Christophe Durand said in February the lender is also open to consolidation to boost growth.
Bahrain’s economy, the smallest among the six members of the oil-rich Gulf Cooperation Council, has been hit hard by low oil prices since 2014.
The country’s Gulf Arab allies met last Wednesday to review a financial support programme designed to help the country repair its finances and stave off a possible currency devaluation that could roil regional markets. — Bloomberg