Muscat: The boards of directors of Al Salam Bank-Bahrain (ASBB) and BMI Bank have resolved to merge the two entities.
The business combination will be carried out by way of exchanging 11 ASBB shares for each BMI Bank share, said a press statement. Under the terms of the proposed business combination, ASBB will acquire 58.5 million BMI Bank shares of BD1 each and issue 644 million ASBB shares of 100 fils each.
A joint statement issued by both banks mentioned that the proposed merger of ASBB and BMI Bank will result in the group becoming the fourth largest commercial bank in Bahrain. Shaikha Hessa bint Khalifa Al Khalifa, Chairperson of ASBB, stated that the offer is subject to approval by ASBB shareholders in their proposed extraordinary general meeting.
She stated that this combination comes in pursuit of the ASBB's strategy towards expansion and growth within and outside Bahrain.
The proposed business combination, if completed, will result in the combined entity having 19 retail branches, including one overseas (Qatar), and 44 automated teller machines (ATMs) and would enhance the visibility of ASBB and consolidate its retail/commercial banking in Bahrain while increasing its market share, Shaikha Hessa stated.
Saturated local market
Sheikh Khalid bin Mustahail Al Mashani, Chairman of BMI Bank, said that taking into consideration the saturated local market, consolidation becomes necessary in order to create larger and stronger financial institutions capable of competing both locally and regionally.
"The combined entity will become an economically significant entity in the domestic market and position itself to expand regionally," he added.
Bank Muscat, in a separate disclosure note, also said that the proposal is subject to approval at the EGMs of both banks, which are expected to take place in September-October of this year.