Bank of Bahrain and Kuwait (BBK) has ditched plans to purchase the Bahrain operations of Ithmaar Bank after failing to reach amicable terms.

Confirming the news in a bourse filing, Ithmaar said: “However, following preliminary due diligence and discussions, both parties could not agree on amicable terms and conditions that would maximise their shareholders’ interests.

“Accordingly, both parties have agreed to abandon all efforts in this connection.”

Ithmaar Bank, a wholly-owned unit of Ithmaar Holding, is an Islamic retail banking business.

IB Capital, another wholly-owned subsidiary of Ithmaar Holding, is an investment subsidiary that holds investments and other non-core assets.

Ithmaar Holding is regulated by the Central Bank of Bahrain and listed on the Bahrain Bourse and Dubai Financial Market.

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Bahrain-based commercial lender BBK started initial discussions regarding the acquisition in August last year.

A month later, the two parties inked a memorandum of understanding (MoU) on the potential deal.

The transaction also included the specific assets of IB Capital.

“When implemented, the plans will significantly expand BBK’s already large operations in Bahrain and add a turn-key, full-service Islamic banking solution, while also bolstering the already well established Ithmaar Bank brand and position it to better capitalise on opportunities for growth,” it was said at the time.

In Q1 2021, Ithmaar Holding posted a net profit attributable to equity holders of $8.86m versus a net loss of $22.58m in the prior year.

This was attributed to improvement in assets performance as well as lower impairment provisions.

Net profit for the quarter to March 2021 stood at $13.85m, as against a net loss of $18.18m a year earlier.

Meanwhile, in a separate development, the National Bank of Bahrain (NBB) acquired a 78.8% stake in Bahrain Islamic Bank (BisB) in January 2020.