Three leading Bahrain-based Islamic banks Capivest, Elaf Bank and Capital Management House have won approval from its shareholders to create a banking giant which will have shareholders’ equity of almost $350 million and assets in excess of $400 million.

The announcement was made after the extraordinary general meetings of the three banks approved the transaction. The merger will be effective after obtaining the final approval of the Central Bank of Bahrain and the Ministry of Industry and Commerce.

This is the first three-way merger to take place in Bahrain, said a statement from Kuwait Finance House - Bahrain (KFH-Bahrain), the transaction advisor. Trowers & Hamlins acted as legal counsel and Deloitte as independent valuer.

Commenting on the merger, Isa Habib, vice chairman of Elaf Bank said, 'The aim of this merger is to establish a strong banking institution that is able to compete solidly in a changing market.'

'The merger will bring instant diversification of assets and revenues. Also, the bank will be able to capture larger projects and will enable it to diversify its capital sources,' he stated.

He said this was in line with the Government of Bahrain’s efforts to enhance the banking sector and reinforce the Kingdom’s position as a regional and international financial hub.

Capivest CEO Mohammed Abdulmalik pointed out that the three banks will gain numerous benefits from the merger; in particular, the merged bank will have a strong balance sheet from day one which will create a positive impact on the country's dynamic banking sector.

'In addition to that, the merger shall enable the new entity to unify its strategy to provide innovative and targeted services to clients. I strongly believe that these three banks constitute a strong and logical combination which is capable of confronting any future challenges,' he added.

Regarding the future vision of the merged bank, Khalid Najibi, the managing director of Capital Management House, said, 'All three have significant cumulative experience in financial services and each has particular niche strength which when combined makes the whole greater than the sum of its parts.'

'This fusion of competitive advantages in various markets makes us all excited and motivated to complete this merger and will work in the near future to announce the new brand identity of the bank which will reflect our client focus and future vision. We look forward to working side by side to achieve our shared goals,' he added.

The trio thanked  the Central Bank of Bahrain, the Ministry of Industry and Commerce and all the other regulatory bodies 'for their continuous guidance and support of the efforts and initiatives of the banking sector in the Kingdom.'-TradeArabia News Service