Kuwait Finance House (KFH) has invited Bahrain’s Ahli United Bank to begin a due diligence process for a potential merger.
In a statement to Boursa Kuwait, KFH said that the scope of the agreement includes valuation studies and work to assess the feasibility of establishing a new banking entity.
KFH said that it will disclose any matters related to the possible merger in a sequential and timely manner.
If the merger materialises, it would join a number of several recent tie-ups to create bigger and stronger lenders in the MENA region.
The major shareholders in the two lenders are Kuwait state-owned entities. The Public Institution for Social Security owns 18.59 per cent of Bahrain’s Ahli United Bank, according to data on the Bahrain bourse.
Additionally, Kuwait Investment Authority (KIA), is the largest shareholder in KFH.
If a merger proceeds, the total assets of the two banks would be $90.57 billion, making it the sixth largest bank in the Gulf, according to Thomson Reuters data.