Bahraini bank, Pension Fund new shareholders of BMIO |21 May 2016

Al Salam Bank Bahrain (ASBB) and the Seychelles Pension Fund (SPF) are now the shareholders of BMIO (BMI Offshore Bank Limited) with 50% of the share capital each.

BMIO was formerly owned by BMI Bank B.S.C based in Bahrain and Seychelles International Mercantile Banking Corporation trading under the name Nouvobanq. ASBB acquired BMI Bank B.S.C in 2014. In view of that, ASBB indirectly held substantial interest in BMIO. To consolidate the restructuring of BMIO, BMI Bank B.S.C has transferred its shareholdings to ASBB. The SPF has purchased all the shares held by Nouvobanq. A new Board of Directors has also been appointed comprising representatives from both shareholders.

Following this change in shareholding, BMIO has changed its name to Al Salam Bank Seychelles Ltd (ASBS).

These developments follow the termination of seizure of BMIO by the Central Bank of Seychelles (CBS).

Since November 11, 2014, the day to day management of BMIO had been taken over by CBS pursuant to Paragraph 1(1) (c) of Schedule 3 of the Financial Institutions Act, 2004 (as amended) (FIA).

The primary reason for the seizure by CBS was due to CBS’ determination that the continuation of its activities would be detrimental to the interests of its depositors in view of BMIO’s loss of and inability to re-establish its correspondent banking relationship.

By virtue of the powers vested in CBS under Paragraph 3(1) of Schedule 3 of the FIA, CBS took the decision to reorganise the bank. Accordingly, Huns Biltoo, a partner from KPMG (Mauritius), was appointed as the Reorganising Agent in accordance with Schedule 4 of the FIA.

The main role of the Reorganising Agent was to prepare and implement a reorganisation plan under the supervision of the CBS. The objectives were to address the core issues at BMIO which have been impeding BMIO’s ability to sustain a permanent correspondent banking relationship and allow BMIO to restore normal operations.

The Reorganisation Plan was approved by the Supreme Court (the “Court”) on June 24, 2015. During the implementation phase, extensions of the reorganisation period were granted by the Court to allow for completion of the relevant restructuring actions in support of the operational improvements. Accordingly, the reorganisation plan was due to be completed by May 24, 2016.

According to the CBS, the change of name from BMIO to Al Salam Bank Seychelles Ltd (ASBS) in line with the rebranding of the bank which is ongoing, in conformity with the wish of the new shareholders’ strategy to allow the bank to trade under the Al Salam Bank group’s trademark in order to better position the bank both domestically and internationally.

“The bank’s shareholders are keen to position the bank to strengthen the onshore banking market alongside its offshore market,” says the CBS in a communiqué.

“ASBS will continue to maintain the current correspondent banking relationship which was established under CBS management. In view that Al Salam is an established banking group with international presence, CBS expects that maintaining this correspondent banking relationship or securing other alternative correspondent banking relationship will not be problematic,” adds the communiqué.

Following the completion of the above mentioned restructuring actions and in line with Section 6(2) of Schedule 4 of the FIA, the Reorganising Agent has informed CBS that the reorganisation of the bank has been completed to his satisfaction. It is on this basis that CBS has terminated its seizure of the bank and has returned full management, control and possession to the local financial institution effective May 20, 2016.