NBB planning to raise BisB stake

MANAMA: National Bank of Bahrain (NBB) is weighing an acquisition of shares in Bahrain Islamic Bank (BisB), both banks said in separate disclosures to Bahrain Bourse (BHB) yesterday.

The conventional lender is “considering making a potential voluntary offer for issued shares in BisB”, it said, without specifying whether NBB would be buying a stake or make a complete acquisition of BisB.

NBB is the second largest Bahraini bank by market capitalisation, according to Reuters data. BisB is the eighth largest by market capitalisation, the data shows.

This is the latest in a flurry of merger activity by Gulf Arab banks as they seek to consolidate their position in an overbanked sector and contend with slower economic growth.

NBB has provided the Sharia-compliant lender with a non-binding offer, the filing said, subject to due diligence, pricing and shareholder and regulatory approvals. The offer may or may not result in a formal offer, it added.

In a bourse filing this August, NBB had said it was in talks to buy Islamic Development Bank’s entire stake in BisB.

As per BHB records, IDB, a Jeddah-based multilateral development bank, owns 14.4 per cent shareholding in BisB.

The deal would have increased NBB’s stake in the Islamic lender from 29.1pc to 43.5pc.

NBB has said then that it had signed a letter of intent with IDB for exploration of the potential acquisition terms and pricing.

It said a transaction adviser was appointed to assist with preliminary investigations and due diligence, declining to disclose any names or an expected timeline for the deal.

In 2013, NBB and SIO Asset Management Company, the investment arm of the Social Insurance Organisation, together bought 51.6pc stake in BisB from its Kuwaiti owners.

The two each took a 25.8pc stake in a deal valued at about BD34.9 million.

Last week, NBB reported its net profit for the first nine months of 2018 rose by 11.3pc to $146.3m from $131.4m, a year ago.

Source: http://www.gdnonline.com/Details/427131