Ahli United Bank, Bahrain’s largest lender, is evaluating a sale or a merger with a rival bank in a potential $5 billion deal, according to reports. A deal of this size would be the largest banking transaction in the region for the past 20 years, beating Emirates Bank’s $3.7 billion acquisition of National Bank of Dubai in 2007 and Qatar National Bank’s $1.9 billion purchase of Societe Generale’s Egyptian business in 2012. AUB is one of only a few banks in the Gulf region with pan-Arab operations and as such offers scope for further growth in countries such as Egypt, where western banks are seeking to cut their exposure. AUB came close to a merger with a bank based in the Gulf Cooperation Council area in 2010 but the financial crisis derailed the deal, said one banker who was involved in the talks but declined to name the bank. Now AUB’s shareholders, which include funds owned by the governments of Kuwait and Bahrain, have resumed plans to cash out, bankers said. They also said any deal would be driven in particular by Kuwaiti shareholders’ willingness to monetise their investments.