By Suleiman Al-Khalidi
AMMAN (Reuters) – Jordan’s Bank al Etihad has acquired smaller peer Investbank in a deal that will create one of the kingdom’s biggest lenders, bank officials said on Thursday.
The two banks’ boards agreed to a stock-for-stock acquisition that will create an entity with a total equity value of over $1.4 billion, Bank al Etihad Chairman Basem Salfiti, told Reuters.
“This will allow the bank to continue and accelerate its growth trajectory with the right resources and strong capital base,” Salfiti said.
The Central Bank of Jordan has long encouraged mergers among a robust and well capitalised banking sector with over $100 billion in assets. Officials say the market is overcrowded with 16 commercial banks.
Bank al Etihad, one of Jordan’s biggest lenders, provides a range of mainly retail services while Investbank is focused on private banking.
The proposed deal will be presented to extraordinary general meetings of both banks scheduled for June 25. It requires final approvals from regulatory authorities, bank officials say.
The combined assets would be 11 billion dinars ($16 billion), positioning Bank al Etihad among the largest banks in the country, Salfiti said.
The merger would allow Bank al Etihad to expand its operations in the domestic market and regionally where it would be looking for opportunities, he said.
(Reporting by Suleiman Al-Khalidi; Editing by Elaine Hardcastle and Emelia Sithole-Matarise)
