Ithmaar Bank, in a statement released yesterday, clarified its intention to further strengthen its position as a regional financial powerhouse by offering to increase its stake in BBK (formerly known as Bank of Bahrain and Kuwait). The consideration to be paid for the increased stake in BBK is through a share swap arrangement where by BBK will issue additional shares to Ithmaar Bank in consideration for a 100% stake in Shamil Bank of Bahrain, presently a wholly owned subsidiary of Ithmaar Bank. Ithmaar Bank currently owns 25.4% of BBK shares.
The statement was released in response to repeated inquiries on the issue following recent press reports.
BBK and Shamil are expected to benefit from the singularly powerful synergy - with extended coverage, diversified offerings, consolidated financial strength and improved customer service across the board - that will be created. This will also contribute, directly, to reinforcing Bahrain’s position as the regional financial hub.
During its meeting last month, the Board of Directors of Ithmaar Bank resolved to offer the shareholders of BBK, through their Board of Directors, the opportunity to acquire a 100% of Shamil Bank against issuing additional BBK shares.
If and when the proposal is finalised by the boards of Ithmaar Bank and BBK, it will be subject to approval from the shareholders of both banks, and will be implemented in accordance with the rules and regulations of the Kingdom. To that end, the board of directors of both banks are expected to call for Extraordinary General Meetings (EGMs) to discuss the proposal and we will work closely with the Ministry of Industry and Commerce (MOIC), the Central Bank of Bahrain (CBB) and the Bahrain Stock Exchange (BSE) to ensure compliance at every juncture.
Once the share swap is complete, the new entity will be able to deploy the combined strengths of two of the Kingdom’s prominent banks. This plan sets the stage for a promising, and certainly the most exciting, change in Bahrain’s financial landscape.
Combining the core strengths of both banks, BBK and Shamil, will pool already significant resources and, in addition to the obvious competitive advantages and the subsequent economies of scale, it will also build a strong capital base capable of facing unforeseen market conditions, and respond to economic changes. With improved financial strength and extended branch and ATM networks as well as other delivery channels, the merged entity will be uniquely positioned to realise the tremendous opportunities that are now being created. This, in turn, will bring significant returns to the shareholders and clientele, as well as contribute towards further developing Bahrain’s financial sector and reinforcing the Kingdom’s position as the regional banking hub.
