The merger of Qatari banks Masraf Al Rayan, Barwa Bank and International Bank of Qatar will take six months to complete, Masraf Al Rayan’s chairman Hussain Ali al-Abdulla said on Sunday.
In December Reuters reported that the trio had begun merger talks which, if successful, would create the Gulf state’s second-largest bank.
Banks in the Gulf have previously been reluctant to link up but are facing challenging conditions due to the impact of lower oil prices on the region’s economies.
The new bank, which would be run in compliance with Islamic banking principles, would have assets worth more than QAR160bn ($44bn).
“I think the merger will finish within six months. There will be a lot of synergy between the three banks,” Abdulla told reporters at Masraf’s annual general meeting on Sunday.
Masraf Al Rayan, an Islamic lender, has appointed KPMG and PricewaterhouseCoopers as merger advisers, along with law firm Allen & Overy as legal adviser, said Abdulla, adding that Barwa Bank and International Bank of Qatar had also chosen advisors.
Masraf Al Rayan’s shareholders approved on Sunday the issuance of sukuk worth up to $2bn to meet the bank’s liquidity needs.
Masraf appointed banks in January to handle a debut sukuk issue of around $500m, banking sources told Reuters that month, but Abdullah said on Sunday the timing of the issue had not been finalised.
Asked whether the bank’s liquidity had been affected by low oil prices Abudullah said “liquidity now is better than in 2016” and that the U.S. Federal Reserve’s raising of interest rates last month would improve the profits of Qatari banks.