Bank of Bahrain and Kuwait (BBK), a commercial bank in Bahrain has signed a memorandum of understanding (MoU) to acquire Ithmaar Bank’s Bahrain operations for an undisclosed amount.
The MoU has been signed with Ithmaar Holding, the parent of Ithmaar Bank, an operator of Islamic retail banking network in Bahrain.
The deal will also include acquisition of specific assets of IB Capital, a wholly-owned subsidiary of Ithmaar Holding.
Last month, the two banks announced that they are conducting initial talks about the potential acquisition. The plans are subject to shareholder and regulatory approvals and the completion of due diligence from both the parties.
Ithmaar Bank can also benefit from the deal in terms of capitalising on growth opportunites
When completed, the acquisition is expected to yield an expansion of BBK’s operations in Bahrain and add a turn-key, full-service Islamic banking solution.
It is also expected to strengthen the all ready established brand of Ithmaar Bank and position it to better capitalise on growth opportunities.
At the time of the announcement of initial talks last month, Bank of Bahrain and Kuwait chairman Murad Ali Murad said: “BBK has long played a key leadership role in the Kingdom of Bahrain’s banking and financial services industry.
“To maintain this leadership role, and as part of its ongoing business expansion strategy, BBK has been exploring opportunities to expand its activities and diversify its offerings, particularly in Sharia-compliant banking businesses.
“Ithmaar Bank seems a natural fit, and we look forward to exploring this possible acquisition further.”
In August, Ithmaar Holding reported a net loss attributable to equity holders of $1.29m for the the six-month period ended 30 June 2020.
It was a 115% decrease compared to the net profit of $8.37m recorded for the same period in 2019.
