Banks worth less than $3 billion to $4 billion are unlikely to survive the next few years, a leading Bahrain banker has warned.

It's survival of the fittest for banks in Bahrain and the Gulf, said Ithmaar Bank chairman Khalid Janahi. "Fittest means biggest," he said.

He was speaking after Ithmaar shareholders backed a move to transform it from an investment bank to a commercial bank and develop its retail business by fusing the parent company with its wholly-owned subsidiary, Shamil Bank.

'We are hoping to develop our operations into a commercial bank with equity of between $3 billion and $4 billion,' said Janahi.

'Anyone who can't achieve that size in the region will not be around a few years down the road.

'There are Saudi banks with only a few branches that could eat up some of the larger players in Bahrain.'

Shareholders agreed to increase Ithmaar's authorised capital to $2 billion.

They also approved three capital raising initiatives that will add up to $500 million to the bank's capital, increasing shareholder equity to about $1.4 billion.

'The shareholder's overwhelming support for the board's proposals has ushered in a new era for the bank,' said Janahi.

'When the reorganisation and capital raising initiatives are completed, Ithmaar Bank will have been transformed into one of the region's largest, most efficient retail-focused Islamic banks.'-TradeArabia News Service