Al Salam Bank Bahrain signs off merger with BMI Bank - IFN

Al Salam Bank Bahrain signs off merger with BMI Bank

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BAHRAIN: After a year of ongoing discussions, Al Salam Bank Bahrain (ASBB)''s shareholders have finally approved the acquisition of BMI Bank. The announcement was made in a bourse filing to both the Dubai Financial Market and the Bahrain Bourse yesterday. The extraordinary general assembly approved the recommendation to merge with BMI through an exchange of ASBB shares. The tie-up is in line with ASBB’s objective to position itself as the largest domestic Shariah compliant bank in Bahrain, and also fits with the Central Bank of Bahrain’s strategy to drive consolidation within the banking sector as a means of creating a healthy competitive environment. In an agreement early last month, both banks consented to the exchange of 11 ASBB shares for each BMI share. Under the terms of the new resolution, ASBB will acquire 58.5 million shares from BMI at BHD1 (US$2.63) per share and subsequently will issue 644 million shares at 100 Bahraini fils (US$0.26) each. Shaikha Hessa Khalifa Al Khalifa, the chairperson of ASBB’s board, stated that the transaction is expected to result in improved earnings sustainability for the group. Following the merger, the entity will have approximately BHD1.8 billion (US$4.74 billion) in assets, financing facilities worth BHD1.2 billion (US$3.16 billion), equities exceeding BHD285 million (US$751.82 million) and total customer deposits of over BHD1.2 billion (US$3.16 billion). The deal is expected to establish the merged group as the fourth-largest financial institution in Bahrain. BMI Bank recently reported a net profit of US$1.4 million for the first half of the year, an increase of 88% from US$700,000 in the corresponding period last year. ASBB on the other hand, recorded a net profit of US$15.88 million, indicating an improvement from the US$2.14 million loss it made in the same period in 2012.