Qatar - 09 June 2019:  Mirroring a trend seen across the Gulf, two lenders in Qatar announced the country’s first bank merger in a move officials say will support economic growth and the development of the financial and private sectors.

On April 21 Barwa Bank and the International Bank of Qatar (IBQ) signalled the finalisation of negotiations and clearance of regulatory requirements necessary to consolidate operations. The merged entity, which will operate as Barwa Bank, will have total assets of more than QR80bn ($22bn) and a shareholder equity base of over QR12bn ($3.3bn).

Notably, the merger resulted in the consolidation of an Islamic bank – Barwa Bank – with conventional IBQ, with the new institution offering sharia-compliant services.

The tie-up is a significant step forward for Qatar’s banking industry, according to Sheikh Mohammad bin Hamad bin Jassim Al Thani, chairman and managing director of Barwa Bank.

“This merger… is a momentous milestone for the local banking sector, regional mergers and acquisitions (M&A) landscape, and sharia-compliant banking industry,” he said when announcing the finalisation of the deal.

The merger will create the third-largest Islamic and sixth-largest overall bank in Qatar, with the consolidated lender having a 5% share of the market, according to ratings agency Moody’s. The new bank, which will also be the ninth-largest sharia-compliant lender in the GCC, is expected to benefit from lower funding costs and improved profitability.