Capital Management House, Capivest and Elaf Bank complete three-way merger deal (By IFN)

Capital Management House, Capivest and Elaf Bank complete three-way merger deal

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BAHRAIN: After more than a year since talks first began, Capital Management House, Capivest and Elaf Bank have successfully concluded a merger deal with the help of Kuwait Finance House-Bahrain (KFH-Bahrain), to create a financial institution with an estimated total equity of US$340 million and total assets in excess of US$400 million. The entity, which has yet to be named, is expected to spur more M&A deals in the kingdom as the call for consolidation becomes clearer throughout the country. In an interview with Islamic finance news, a spokesperson from KFH-Bahrain said: “There is a need for consolidation in the industry in Bahrain and the wider GCC. The merged bank will have access not only to investors based in Bahrain, but also those in the GCC and wider MENA region. The merged bank's board in its first meeting will review the new strategy to be proposed by the selected management team, which will also determine the geographical focus.” In terms of the individual strengths each bank brings to the table, the spokesperson said: “Each bank has its own area of strength in various asset classes. To name a few, the merged bank will have real estate investment expertise, private equity capabilities, a capital markets transactions track record and a strong investor base.” He also added that a lack of regional precedence in the market or the industry itself had posed as a challenge to the merger, amongst other issues: “Working through the uncertain times with continued slow markets and regional political uncertainty also made it more difficult. But with the involvement of KFH-Bahrain and the contributions of the three merging banks themselves we were able to address the challenges and create a more robust financial institution capable of better competing in the global Islamic banking and investment industry.” Commenting on the investment preferences of Bahraini investors, the KFH-Bahrain spokesperson said: “In line with the global trends, investors in these regions are seeking income yielding and asset based investments.”