Three-way bank merger stalled over price

Talks to merge three Qatari banks have hit a roadblock as shareholders, which include former Prime Minister Shaikh Hamad Bin Jassem Al Thani, disagree on price, according to people with knowledge of the matter.

Masraf Al Rayan, Barwa Bank QSC and International Bank of Qatar had reached an initial agreement over pricing late last year that has since fallen apart, the people said, asking not to be identified because the matter is private.

Discussions are currently on hold and it’s not clear if the deal will be revived, the people said.

Qatar started talks in December 2016 to create the country’s largest Shariacompliant bank and the Middle East’s third-biggest Islamic lender with more than 178 billion riyals ($49 billion) of assets.

The banks had aimed to complete the merger by the end of 2017.

The tie-up will be done once regulators approve the deal, Masraf Chairman Hussain Al Abdullah said in February.

Shares down

Shares of Masraf, the only listed bank involved in the merger plan, closed down 1.7 per cent to 35.69 riyals in Doha, the biggest drop in almost six weeks.

About 780,000 shares traded, 69 per cent more than its 30-day average.

The delay is “bad news, because the three banks combined would be able to compete better in the Qatar market,” said Sanyalak Manibhandu, an Abu Dhabi-based equities analyst at FAB Securities LLC.

“Combining also provides opportunities to extract synergies from saving overheads, direct costs and investing in digitisation.”