Bahraini retail powerhouse Bahrain Islamic Bank (BisB) has, according to local press reports, opened up discussions with domestic rival Al Salam Bank over a potential merger.
The marriage would create Bahrain's largest Islamic lender with assets of BHD1.7bn ($4.5bn).
BisB's chairman, Khalid Abdulla Al-Bassam has driven BisB to become one of Bahrain's Islamic finance powerbrokers, but to take on the regional giants, the bank needs a bit more juice in the tank. Hence the opening-up of discussions with Al Salam Bank, whose experience in corporate, private client and investment banking would complement BisB's strength in the retail arena, seems to be a shrewd move.
Despite the problems earlier in the year with internal uprisings, and occupation by Saudi and Emirati troops, Bahrain is still the region's leading Islamic finance hub. With its reputation tarnished, the local industry needs a champion that could take 'Brand Bahrain' overseas, and a combined BisB/Al Salam entity could fit the description.
In March, BisB postponed a planned $143m rights issue, citing unfavorable market conditions.
Neither institution responded to requests for comment.
© The Islamic Globe 2011
