Manama: Bahrain-based Islamic investment bank GFH Financial Group (GFH) has signed a memorandum of understanding to buy a majority stake in Bank Al Khair, a Bahraini lender with a presence in several countries.
In a statement to Bahrain Bourse (BHB), GFH didn’t give any financial details but said the acquisition, if it went ahead, would “create a larger financial group having banking operations within the GCC, the UK, Malaysia, Turkey, Pakistan and India”.
Founded in 2004, Bank Al Khair is an Islamic bank with total assets of $580.5 million as of March 2016.
GFH has assets of $2.7 billion, the data shows.
The deal is subject to approval by the boards of directors and shareholders of the banks, as well as completion of due diligence and regulatory approvals, BHB-listed GFH said, adding that the structure of the acquisition also had to be agreed.
The acquisition would benefit shareholders of the combined entity, although the impact on GFH’s financial position cannot be measured at the moment, it added.
In May, GFH revealed plans to list its Bahrain-based retail banking subsidiary Khaleeji Commercial Bank (KHCB) in Dubai and said it would acquire a financial services company to increase shareholder value.
In June 2013, KHCB and Bank Al Khair had signed a memorandum of understanding to evaluate the feasibility of a merger between them, but the plan was dropped in early 2014 after they failed to agree on terms.
GFH has been buying assets actively since last year.
Last October it agreed to acquire a US industrial real estate portfolio in a deal worth $125m, and in May last year it said it would buy a mall in the Saudi Arabian city of Jeddah for $48m.
Earlier, GFH said it had repaid $45m worth of debt, bringing its total syndicated liabilities down to $105m.
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