Bahrain-based Al Salam Bank is acquiring Ithmaar Bank’s consumer banking unit, Ithmaar Holdings’ ownership stake in both Bank of Bahrain and Kuwait (BBK) and Solidarity Group Holding, one of the largest Takaful groups globally and the parent of Solidarity Bahrain.
This announcement, in line with the Central Bank of Bahrain’s (CBB) objectives to develop the Islamic finance industry, follows the execution of a Memorandum of Understanding (MoU) between the two entities in October 2021. The transaction remains subject to the approval of Ithmaar Holding’s shareholders and the signing of definitive agreements.
Ithmaar Bank, a key player in the development of Islamic finance in Bahrain and the wider region, will remain a wholly-owned subsidiary of Ithmaar Holding and will continue its journey as an innovative and agile Sharia-compliant banking institution following this strategic transaction.
“The transaction supplements the achieved organic growth during the past 3 years cementing Al Salam Bank’s position as the fastest-growing bank in Bahrain. The Bank has a robust track record of successfully achieving inorganic growth through targeted acquisitions of assets in line with our long-term growth strategy. The acquisition of Ithmaar Bank’s consumer banking portfolio, with its rich history spanning almost four decades, will further reinforce Al Salam Bank’s position as a leading financial institution in Bahrain.”
Al Salam Bank has an excellent track record in Mergers and acquisitions (M&A), reflected in the Bank’s successful acquisition of BMI Bank and merger with Bahraini Saudi Bank (BSB) in 2014 and 2011 respectively.
This transaction will position Al Salam Bank as the largest Islamic lender in Bahrain by accelerating the pace of market share acquisition in the consumer banking segment and the implementation of its strategy of expanding its core-banking operations.
HRH Prince Amr Al Faisal, the Chairman of Ithmaar Holding said that “This transaction with Al Salam Bank is in line with Ithmaar Holding’s long-standing strategy of creating value for its shareholders by delivering synergies within its portfolio holdings. Following the transaction, Ithmaar Holding will continue to hold a well-diversified portfolio of international and local financial and other assets which includes banking businesses in Bahrain and Pakistan.”