The planned merger of two Bahraini banks, intended to create the largest Islamic lender in the Gulf Arab kingdom, could pave the way for more consolidation in a regional industry frozen in its tracks by unrealistic valuations and ownership limits.
The proposed tie-up between Bahrain Islamic Bank BISB.BH and smaller rival Al Salam Bank SALAM.BH to create a $4.5 billion entity, unveiled this month, is a litmus test for the region after the last attempted merger, between two Qatari banks, failed.
The two Bahraini lenders said late on Tuesday that they had received approval from the central bank for their planned merger and have hired KPMG Fakhro as advisor.
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