Bank of Bahrain and Kuwait (BBK), one of the largest commercial banks in the Kingdom, has held initial talks with Ithmaar Holding Company to acquire Ithmaar Bank’s operations in Bahrain.
The bank runs the largest Islamic banking network for individuals in Bahrain. The acquisition also includes specific assets of IB Capital, a wholly-owned subsidiary of Ithmaar Holding.
The plans, subject to shareholder and regulatory approvals, are still in the preliminary discussion stage and subject to the completion of due diligence by both parties.
BBK Chairman Murad Ali Murad said that BBK has long played a major leadership role in the banking and financial services sector in the Kingdom of Bahrain. To maintain this leadership role, and as part of its ongoing strategy to expand its business, BBK is exploring opportunities to expand its activities and diversify its offerings, particularly in Sharia-compliant banking. Ithmaar Bank appears to be a natural fit, and they are looking to explore further potential acquisitions.
Earlier this week, Ithmaar Holding revealed a 43% drop in net profit for the first six months of the year, which was blamed on the economic impact of the global Covid-19 pandemic. The investment firm has seen its first-half earnings drop from $ 13.02 million in 2019 to $ 7.40 million this year.
The Chairman of Ithmaar Holding Company Prince Amr Al-Faisal said that Ithmaar Bank is an Islamic retail bank that has played a pioneering role in establishing and developing Islamic banking services in the region. Ithmaar Bank is a wholly-owned subsidiary of Ithmaar Holding, which is a growing and resilient bank that continues to invest in the future and plays a major role in society. This transaction is in line with Ithmaar Holding’s strategy to create value for its shareholders, and they look to explore this potential opportunity further.