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Gulf banks move step closer to creating $115bn new lender

Kuwait Finance House

Kuwait Finance House (KFH) has made a firm offer to buy Bahrain’s Ahli United Bank (AUB).

The bumper deal would create the Gulf’s seventh-largest lender with $115 billion in assets.

In a statement on the Bahrain Stock Exchange on Monday, AUB said it had received a notice of firm intention from KFH to acquire 100 percent of shares in the Bahraini lender.

Earlier this month, the value of the deal was estimated at around $11.6billion. 

Kuwait’s central bank approved the merger this month, further evidence of an ongoing trend for bank mergers in the Gulf, as lenders react to the tightening economic conditions in a post-pandemic environment, and the rise digital banks.

Masraf Al Rayan and Al Khalij Commercial Bank agreed to combine last year, while Saudi Arabia’s National Commercial Bank bought Samba Financial Group in 2020.

In June, HSBC Bank Oman said it would hold preliminary talks with local rival Sohar International Bank for a potential merger.