Ithmaar Bank and First Leasing Bank merger reach advanced stage (By IFN)

Wednesday 3^rd October 2012

BAHRAIN: Ithmaar Bank has announced that discussions on a proposed merger with its associate, First Leasing Bank, have reached an advanced stage, one year since Islamic Finance news first reported the deal. In a statement, Mohammed Bucheerei, chief executive and a board member of Ithmaar, said that the merger has been approved by the banks’ boards, while the Central Bank of Bahrain has also granted its initial approval for the deal. The transaction will involve a share swap between the two banks, he said. The merger will be proposed to the banks’ shareholders at extraordinary general meetings slated to be held at the end of this month. If the shareholders approve the deal, the proposal will then need final approval from the central bank and Bahrain’s ministry of industry and commerce. “Since Ithmaar’s reorganization in April 2010 with its then wholly-owned subsidiary Shamil Bank and its subsequent transformation from an investment bank into an Islamic retail bank, Ithmaar has focused on developing its retail and commercial banking operations. In doing so, we allow for an exclusive focus on our retail banking operations. More importantly, this also creates a powerful synergy within the new, rationalized group structure,” said Mohammed Bucheerei. Ithmaar currently owns 21.32% of First Leasing Bank, which is licensed by the central bank as a wholesale conventional bank. However, it is principally engaged in the provision of operating equipment leasing via Ijarah, while it also provides asset management and trade finance.