DUBAI/LONDON (Reuters) - Qatari lenders Barwa Bank IPO-BABK.QA and International Bank of Qatar are in advanced talks to merge after discussions for a three-way merger with another bank collapsed last week, sources told Reuters on Wednesday.
The proposed merger between the two banks could be announced as early as next week, one of the three sources close to the deal said.
The value of the transaction was not immediately available. The two banks had total assets of 81.7 billion riyals (17.1 billion pounds) at the end of last year, according to their financial reports.
Barwa Bank and International Bank of Qatar were not immediately available to comment.
Last week Islamic lender Masraf Al Rayan MARK.QA and conventional lenders Barwa Bank and International Bank of Qatar (IBQ) had announced that they had ended talks for a three-way merger. The talks had begun in December 2016, but sources said the talks stalled over the valuation.
A shake-up has long been mooted in the Qatari banking sector, given that 18 local and international commercial banks serve a population of 2.6 million.
The argument for consolidation has become more compelling after a diplomatic boycott by Saudi Arabia, the United Arab Emirates, Bahrain and Egypt, which could further dent the banking sector growth, analysts said.Banking consolidation has accelerated in the region in recent years with deals in the United Arab Emirates, Saudi Arabia and Oman.
Reporting by Hadeel Al Sayegh in Dubai, Pamela Barbaglia and Dasha Afanasieva in London, Editing by Saeed Azhar and Louise Heavens