Bahrain's Ithmaar Bank to merge with affiliate

DUBAI, Oct 2 (Reuters) - Ithmaar Bank , Bahrain's sixth-largest bank by market capitalisation, is in advanced talks to merge with an affiliate through a share swap agreement, the Islamic lender said in a statement on Tuesday.

Shareholders of Ithmaar and unlisted First Leasing Bank will vote on the merger at meetings scheduled to take place at the end of October after the boards of both banks agreed to the tie-up, the filing to the Bahrain stock exchange said.

The merger will be completed through a share swap arrangement, details of which will be discussed at the upcoming shareholder meeting.

The move was part of Ithmaar's "vision of becoming a premier Islamic retail bank," said Mohammed Bucheerei, chief executive of Ithmaar Bank.

The merger has received initial approval by the Central Bank of Bahrain but still requires a formal assent from the banking regulator and the Ministry of Industry and Commerce, the statement added.

Ithmaar Bank holds 21.32 percent of First Leasing Bank, with the rest spread among 33 other stakeholders.

(Reporting by David French; Editing by Dinesh Nair)

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