MANAMA: Bahrain looks set to have a new Islamic bank with assets in excess of $400 million in the second half of the year.

Capivest, Elaf Bank and Capital Management House have been in merger talks to create this new institution for some time and their shareholders will be voting on a proposed merger by the end of the month.

The transaction is the first three-way merger to take place in Bahrain.

The banks have been advised on the merger by Kuwait Finance House-Bahrain (KFH-Bahrain).

The proposed merger was announced in September last year and since then the three banks have been meeting regularly to discuss the details of the transaction.

"This merger is in line with the Bahrain government's efforts to enhance the banking sector and reinforce the kingdom's position as a regional and international financial hub," said KFH-Bahrain chief executive Abdulhakeem Alkhayyat.