National Bank of Bahrain (NBB) is mulling an acquisition of shares in Bahrain Islamic Bank (BisB), a Shariah-compliant lender.

BisB has secured a non-binding notification from NBB regarding a potential voluntary offer for issued shares.

NBB said in a filing that the move is subject to completion of diligence investigations, internal pricing assessment as well as board and shareholder approvals.

However, the banks also stressed that they have not signed any formal documents in this regard.

In the recent times, banks in the Gulf region are increasing looking at merger opportunities.

Last year, First Gulf Bank and the National Bank of Abu Dhabi consolidated operations to create the largest bank in the UAE. The merged entity is called First Abu Dhabi Bank.

Earlier this month, Alizz Islamic Bank and Oman Arab Bank inked a memorandum of understanding for a potential merger, while Saudi British Bank and Alawwal Bank signed a merger agreement.

Kuwait Finance House is also exploring the possibility of a potential merger with Bahrain’s Ahli United Bank, while Barwa Bank and International Bank of Qatar already agreed to merge operations.