Masraf Al Rayan, Barwa Bank and International Bank of Qatar (IBQ) have called off their proposed three-way merger that otherwise would have created the second-largest bank in Qatar with total assets of QR173bn and a market share of around 14%.
Announcing that the negotiations on the proposed merger between the three banks have now ended, the banks said they "could not reach an agreement to complete the transaction".
Accordingly, the three banks shall continue their business as usual in line with their individual business plans, a communiqué from the Qatar Stock Exchange said. However, it did not specify the reasons.
Masraf Al Rayan is a listed entity, while Barwa Bank and IBQ are not listed. At present, there are 18 banks in Qatar with QNB being the largest with a market share of more than 40% of domestic assets.
The proposed merger would have created the largest Islamic bank and second largest bank in Qatar, and would have resulted in a more balanced competitive environment in Qatar's banking system, Moody's, an international credit rating agency, had said in a report.
Last year, a committee, approved by the three collective boards of directors of the said banks, had been established to oversee the three-way merger.
In 2011, al khaliji and IBQ had entered into merger talks, which however did not proceed further.
Islamic banking assets growth has outpaced conventional banking in recent years in Qatar with them reporting a 21% compound annual growth rate of financings during 2011-16 against 14% for the conventional lenders, Moody's had said.
The Qatar Central Bank's regulation to restrict conventional lenders to offer Islamic window since the end of 2011 has been one of the key drivers of this growth. Although credit growth in the Gulf Co-operation Council has moderated on lower oil prices, Islamic banks are expected to post "double-digit" growth, it added.