Kuwait Finance House-Bahrain (KFH-Bahrain) has announced the closing of the first ever merger between three Bahrain-based Islamic banks, Elaf Bank, Capital Management House and Capivest.

The merger created a strengthened financial institution with a total equity of approximately $340 million and total assets in excess of $400 million spanning the Mena region, Europe and Asia.

As transaction and lead advisor, KFH-Bahrain, after having initiated discussions with the three banks in late 2011, worked closely with them to create a robust merged entity that is able to better compete in the dynamic and growing global Islamic banking and investment industry.

The expertise and services of the banks are highly complementary, laying the groundwork for a smooth integration process.

Furthermore, with a larger capital base, the newly created institution will be better positioned to participate in larger investments and projects and to quickly and more effectively capitalize on a broader set of available opportunities both across the Mena region and globally.

Abdulhakeem Alkhayyat, managing director and CEO of KFH-Bahrain who chaired the merger steering committee, said: "We are delighted to announce the legal and financial closing of this historic merger. With an enhanced capital base, diverse mix of shareholders, assets and revenues, a new bank emerges with the size, scale and resources to deliver greater investment opportunities and value to both investors and shareholders alike.”

"As the first transaction of its kind, KFH-Bahrain is honoured to have successfully originated, executed and closed the merger. Our advisory capabilities and KFH’s position and role in the Islamic banking industry ensured that the process was completed in a fair and transparent manner.

“Not only does the merger provide a model and catalyst for further mergers in  Bahrain, the GCC and wider global Islamic banking market, it also creates a stronger and more competitive financial institution here in the region,” added Alkhayyat.

“We are confident that the merged shareholder and human resource base provides for the selection of a strong board and a capable management team pooled from within the existing resources of the three banks.”

“We would like to extend our thanks to the shareholders of the three banks for their support of the merger as well as express our appreciation for the diligent work carried out by the merger Steering Committee and its members,” Alkhayyat continued.

“We would also like to thank the Central Bank of Bahrain and the Ministry of Industry and Commerce for their cooperation and guidance during the merger process,” he concluded.

Also advising on the transaction was Deloitte, Dubai as the Financial Advisor, Trowers & Hamlins as Legal Advisors and Elham Ali Hassan and Associates as Local Legal Counsel.

Kuwait Finance House-Bahrain is a leading provider of Islamic commercial and investment banking services. – TradeArabia News Service