Ithmaar Bank and Shamil Bank shareholders vote in favour of share swap

Ithmaar shareholders also agreed to the doubling of the Bank's authorized share capital from $500m to $1bn, with each share remaining at a nominal value of 25 US cents. They approved the issuance of 729,600,000 new shares, including 288,000,000 bonus shares that will go to existing Ithmaar shareholders, with the remainder swapped for Shamil Bank shares.

The acquisition, subject to the approval of the Ministry of Industry and Commerce, will be carried out by swapping every 10 shares held by minority shareholders in Shamil Bank for 12 shares in Ithmaar Bank. Once completed, the transaction will make Shamil Bank a wholly owned subsidiary of Ithmaar Bank. Shamil Bank, however, will continue to operate under its own brand name.

Ithmaar Bank Chairman Khalid Abdulla-Janahi said that this acquisition will further strengthen the synergy between Ithmaar and Shamil, both of which are leaders in their respective fields.

"This transaction is another step towards consolidating the different companies that make up the Ithmaar banking group. Shamil will undoubtedly benefit from having a closer association with a global financial institution like Ithmaar Bank, which will help it uncover new opportunities and enter new markets," he continued.

"Ithmaar Bank, meanwhile, further consolidates the existing relationship with its subsidiary, Shamil Bank, one of the most profitable and fast-growing Islamic institutions in Bahrain. This strategic acquisition demonstrates how highly we value its role within the group. Shamil Bank has very strong brand equity in the Kingdom and a sizable market share. It will, therefore, continue to operate under its current name," Janahi added.

Ithmaar Bank, a Bahrain-based investment bank with global reach, currently owns 60% of Shamil Bank, one of Bahrain's leading Islamic commercial and investment banks. This followed a $401m purchase in August last year of 547,916,692 shares in Shamil from Dar Al-Maal Al Islami (DMI) Trust of the Bahamas. That transaction also gave Ithmaar Bank a controlling stake in the Shamil's subsidiaries Pakistan-based Faysal Bank Limited (FBL) and Swiss-based Faisal Private Bank (FPB). The coming share swap would make FPB, already a part of the Ithmaar banking group, wholly owned by Ithmaar Bank, while Ithmaar's effective stake in FBL would increase from 51% to 65%.

"Ithmaar Bank and Shamil Bank complement each other perfectly and we firmly believe that this transaction can only bring good news to the shareholders of both institutions. We look forward to a new level of cooperation between the two banks in the years to come," said Shamil Bank Chairman Mohamed Abdulla Al Anqari.

Ithmaar Bank's business spans the Middle East, North Africa and South Asia (MENASA) region, as well as Asia-Pacific and Europe. Besides holding significant investments in the banking, financial services and real estate sectors in different markets, the main activities of the Bank include underwriting (equity and other financings), private equity (structuring, participation and portfolio management), Islamic financing, private banking, and advisory services covering project financing, investments, capital markets and mergers & acquisitions. With a paid-up capital of $230m, Shamil Bank operates a strong local branch and ATM network across Bahrain, complemented by a well staffed call centre and a team of direct sales agents. It has an established reputation as an innovator of Sharia-compliant financial products.

Faisal Bank Limited (FBL) is a full service banking institution offering consumer, corporate and investment banking facilities throughout Pakistan. It has a widespread and growing network of branches in the main provinces of the country and Azad Kashmir. Faysal Private Bank (FPB) has an established track record in tailoring innovative wealth management portfolios, principally in global real estate.

Its business model caters to the long-term financial well-being of clients with unique wealth management needs, while staying within the boundaries of ethical principles derived from the Sharia. The Ithmaar banking group also includes Solidarity, First Leasing Bank (FLB) and Ithmaar Development Company (IDC). This allows the group to cover the entire spectrum of Islamic banking services, including investment, commercial and private banking, private equity, mergers and acquisitions advice, takaful, equipment leasing and real estate development.