The proposed merger between Bank of Bahrain and Kuwait (BBK) and the National Bank of Bahrain (NBB) remains on track for potential completion this year, despite ongoing regional economic challenges, a Gulf Daily News report said.

Addressing shareholders during the bank’s annual general meeting (AGM) on Tuesday, BBK Group chief executive officer Yaser Alsharifi confirmed that the merger is being treated as a “national priority” with significant strategic value for the kingdom’s banking sector, writes  Avinash Saxena.

“The merger remains a top priority for both banks,” Alsharifi said. “It is viewed not just on a national level, but also as a major value-creation opportunity for our shareholders.”

Providing an update on the progress of the deal, the CEO noted that financial, legal, and commercial due diligence are currently moving “at pace” in accordance with the timetable established by the respective boards.

These processes are essential for determining the final valuation of the merged entity, as well as the all-important exchange ratios and terms and conditions required to finalise the deal.

“We believe that completion is still possible during this year,” Alsharifi said, though he noted he was unable to provide a more specific date at this stage of the negotiations.

Responding to concerns regarding how the current “regional crisis” and “unfortunate circumstances” might impact the deal’s viability or valuation, Alsharifi maintained a cautious but optimistic stance.

“This is a countrywide crisis, and we continue to vigilantly follow all developments so that, as an institution, we can play our active role. We believe, like all crises, this will come to an end,” he said.

Crucially, he added that there is currently no indication that the prevailing regional situation will derail the merger or negatively impact the strategic rationale behind joining forces with NBB.

The merger, once completed, is expected to create one of the largest financial powerhouses in the region, significantly enhancing Bahrain’s competitive edge in the regional banking landscape.