MANAMA, BAHRAIN – 23 February 2013 – Ithmaar Bank, a Bahrain-based Islamic retail bank, announced today (ed note: 23/02/13) that it had merged with one of its Bahrain-based associates, First Leasing Bank.

The announcement follows the final approval of the Central Bank of Bahrain (CBB) and the Bahrain Ministry of Commerce and Industry (MOIC), as well as the completion of the three-month and the sixty-day notice period required by the CBB and the MOIC respectively.

The merger increased Ithmaar Bank’s issued and paid-up capital by $56.7million to $758million after the Bank issued 226.7 shares to all First Leasing Bank shareholders, except those held by and on behalf of Ithmaar Bank, at a nominal value of 25 cents per share. The Ithmaar Bank-First Leasing Bank merger involved a swap of four Ithmaar Bank shares for each FLB share

This follows the approval of the shareholders of both banks during separate Extraordinary General Meetings that were held in Bahrain on 21 October 2012.

Ithmaar Bank Chief Executive Officer and Member of the Board, Mohammed Bucheerei, said the merger is in line with the Bank’s commitment to concentrating on further developing its core business and continuing its growth.

The merger, which increased Ithmaar Bank’s paid up share capital to $758 million, enhances Ithmaar’s capital base as well as its capital adequacy ratios. It also improves Ithmaar shareholders’ profile.

The Bank has begun necessary procedures in coordination with the Bahrain Bourse to merge the registrar of FLB shareholders to the registrar of Ithmaar shareholders. These procedures are expected to be completed shortly. 

A recent report, published by the Bahrain Bourse, indicates that Ithmaar Bank shares saw more than 160percent growth in 2012, despite a 6.83 decline in the Bahrain All Share Index that year. The same report also ranked Ithmaar shares as the most traded (number of transactions) shares among the 41 local listed companies in 2012, and the second highest in terms of both Value of Shares Traded and volume of Shares Traded.

The merger will also consolidate Ithmaar Bank’s position as an Islamic retail bank and create powerful new synergies, improving efficiencies and reducing costs. Ultimately, this translates into a renewed focus on developing Ithmaar Bank’s core business of retail and commercial banking operations and on fuelling its continued growth.

First Leasing Bank was specialised in offering equipment leasing and, as an Islamic retail and commercial bank. Merging the two operations creates unique opportunities for further developing Ithmaar’s core business while reducing costs and improving efficiencies.

Since Ithmaar Bank’s reorganisation in April 2010 with its then wholly-owned subsidiary, Shamil Bank, and its subsequent transformation from an investment bank into an Islamic retail Bank, Ithmaar has focused on developing its retail and commercial banking operations. This is in line with the Ithmaar board-approved vision of becoming a premier Islamic retail bank.