“Bahrain’s Al Salam Bank has received offers for 90.4 percent of the shares in Bahraini Saudi Bank after extending its takeover offer to July 12”( “Al Salam receives offers for 90% of BSB shares”). Bahraini Saudi bank deals in services to retail and commercial sector. “Bahraini Saudi Bank was established in 1983 with a paid in capital base of BHD 20 million, equally held between Bahraini and Saudi shareholders” (“Al Salam receives offers for 90% of BSB shares”). Al Salam offered 27 million Dinars ($ 71.62 million) for BSB. However, it communicated to carry its own operations in BSB. “BSB raised its paid up capital to BHD 50 million, following the successful completion of its rights share offering in year 2005” (“Al Salam receives offers for 90% of BSB shares”).
BSB has its own market for the commercial sector in Bahrain. The acquisition will help Bahrain’s Al Salam bank to expand its customer base and services. Among major shareholders of BSB are investment groups including “The Pension Fund commission, Awal Group, Capital Finance Investment Company, Al Fateh Investment, Mohammad Bin Fahad Bin Abdulaziz Al Saud, Fahad Mohammad Saleh Al Athel and Ibrahim Jaber Husain Al Ahmadi” (“Al Salam receives offers for 90% of BSB shares”). However, many smaller banks are more than ready for acquisitions pertaining to market situation. Al Salam bank could also opt for including these banks in its schemes. In the year 2004 “except Bahraini Saudi Bank other banks managed to increase their non-interest income” (“Bahrain banking sector still ahead”). Competitor Dubai is a major threat to operating Banks in Bahrain. In rising competition, Banks should look for capitalizing non-interest income from other sources. “Dubai is aggressively marketing the Dubai International Financial Centre (DFIC), initiative which has the potential to undermine the Bahrain’s role as the regional financial hub” (“Bahrain banking sector still ahead”).
Works cited
“Al Salam receives offers for 90% of BSB shares”. arabianbusiness.com. Arabian Business, n.p, 2009. Web.
“Bahrain banking sector still ahead”. Ameinfo.com. AMEinfo, n.p, 2004. Web.
“Bahraini Saudi Bank”. arabianbusiness.com. Arabian Business, n.p, 2009. Web.