Bahrain-based Ithmaar Bank has announced that it has formally concluded a merger with one of its associates, First Leasing Bank (FLB).

The announcement follows the final approval from the Central Bank of Bahrain (CBB) and Industry and Commerce Ministry, as well as the completion of the three-month and the 60-day notice period required by the CBB and the ministry respectively.

The merger raised Ithmaar Bank's issued and paid-up capital by $56.7 million to $758 million after the bank issued 226.7 shares to all FLB shareholders, except those held by and on behalf of Ithmaar Bank, at a nominal value of 25 cents per share.

The Ithmaar Bank-First Leasing Bank merger involved a swap of four Ithmaar Bank shares for each FLB share.

This follows the approval of the shareholders of both banks during separate extraordinary general meetings that were held in Bahrain in October.

Ithmaar Bank chief executive Mohammed Bucheerei said the merger is in line with the bank's commitment to concentrating on further developing its core business and continuing its growth.

The merger enhances Ithmaar's capital base as well as its capital adequacy ratios. It also improves Ithmaar shareholders' profile.

The bank has begun necessary procedures in co-ordination with the Bahrain Bourse to merge the registrar of FLB shareholders to the registrar of Ithmaar shareholders.

These procedures are expected to be completed shortly.

A recent report, published by the Bahrain Bourse, indicates that Ithmaar Bank shares saw more than 160 per cent growth in 2012, despite a 6.83 per cent decline in the Bahrain All Share Index that year.

The same report also ranked Ithmaar shares as the most traded in numbers of transactions among the 41 local listed companies in 2012, and the second highest in terms of both value of shares traded and volume of shares traded.

"The merger will consolidate Ithmaar Bank's position as an Islamic retail bank and create powerful new synergies, improving efficiencies and reducing costs," said Bucheerei.

"Ultimately, this translates into a renewed focus on developing the bank's core business of retail and commercial banking operations and on fuelling its continued growth.”

"FLB was specialised in offering equipment leasing and, as an Islamic retail and commercial bank. Merging the two operations creates unique opportunities for further developing Ithmaar's core business while reducing costs and improving efficiency."

Since Ithmaar Bank's reorganisation in April 2010 with its then wholly-owned subsidiary, Shamil Bank, and its transformation from an investment bank into an Islamic retail bank, Ithmaar has focused on developing its retail and commercial banking operations.

This is in line with the Ithmaar board-approved vision of becoming a premier Islamic retail bank. – TradeArabia News Service