Mubasher: Moody's Investors Service expects considerable integration challenges with the proposed merger between Masraf Al Rayan, Barwa Bank, and International Bank of Qatar.
According to Moody’s, the merged entity could alter the group's overall risk profile in terms of solvency, capital and profitability, as well as liquidity, liquid assets, and access to funding.
The proposed merger between the three Qatari banks, if successfully completed, would create the largest Islamic bank and second largest bank in Qatar, and would result in a more balanced competitive environment in Qatar's fragmented banking system, Moody's said in a report published on Tuesday.
The merger is currently at the due diligence stage and will be subject to approval by the relevant authorities and the three banks' shareholders.
If the merger is completed, it would create an entity with total assets amounting to around QAR 173 billion ($48 billion) and a market share of around 14%.
The combined entity would be the fourth-largest Islamic bank in the GCC.
Moody's expects the enhanced franchise of the merged entity to benefit from the growth of Islamic assets in the GCC, the report indicated.
