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Bloomberg
Bahrain’s GFH Financial Group is in talks to buy a majority stake in Islamic lender Bank Alkhair.
GFH has signed a memorandum of understanding for the potential acquisition, which is
subject to board and shareholder approval, completion of due diligence, agreement on an acquisition structure and regulatory approvals, according to a statement Monday to the Dubai stock market.
Bank mergers in the Gulf are expected to increase following Abu Dhabi’s decision to combine its two largest banks, National Bank of Abu Dhabi and First Gulf Bank. That may pressure other lenders in the United Arab Emirates to pursue deals, Dubai-based investment bank Arqaam Capital Ltd. said in June. Khaleeji Commercial Bank abandoned plans to merge with Bank Alkhair in 2014 after failing to agree a structure for the transaction.
The value of the potential deal was not disclosed. Privately-owned Bank Alkhair made a loss of $2.5 million last year and has assets of $585 million, according to financial statements on its website. GFH, which is listed in Bahrain, Kuwait and Dubai, made a profit of $5.8 million and has assets of $2.6 billion.
If GFH completes the acquisition of Bank Al
Khair it would create a larger financial group with operations in the Gulf Cooperation Council, U.K., Malaysia, Turkey, Pakistan and India, GFH said in the statement.