KUWAIT: Burgan Bank announced that it has obtained the final approval from the Central Bank of Kuwait (CBK) to acquire 100% stake in United Gulf Bank (UGB), a licensed conventional wholesale bank headquartered in Bahrain. The execution of this transaction remains subject to closing formalities that are expected to be completed by the first quarter of 2025 (Q1’25).

The purchase price of this transaction has been settled at USD 190 million, which roughly translates to 1.0x of UGB’s current shareholders’ equity or book value. This acquisition is expected to have an impact of 60 to 70 basis points on Burgan Bank’s regulatory capital ratios, predominantly due to the consolidation of UGB’s assets. The final impact would be determined at the closing of shares’ transfer. It is worth mentioning that UGB has a 60% stake in Kamco Investment Company (Kamco Invest).

Mr. Tony Daher, Group Chief Executive Officer at Burgan Bank, said: “The 100% acquisition of UGB aligns with the Bank’s new asset reallocation strategy and efforts to build new and diversified revenue streams. This transaction would benefit Burgan by providing access to KAMCO Invest’s platform to further drive its non-interest income. Additionally, it will help expand the Bank’s footprint across the GCC region while contributing to bolstering potential revenues and synergies through UGB’s banking license.”

Mr. Daher emphasized that the Bank’s ongoing efforts to achieve sustainable growth and implement expansion plans are guided mainly by its vision to become the most modern and progressive bank in Kuwait. This vision is driven by a focus on key strategic pillars, including asset reallocation, embracing digital transformation, investing in human capital development, and adhering to environmental, social, and governance (ESG) standards in order to deliver an outstanding banking experience that lives up to customers’ aspirations and meets their needs.

It serves to note that in June 2024, Burgan Bank announced that it had received CBK’s initial approval to engage with Bahrain’s regulatory authorities regarding the acquisition of a 100% stake in UGB. Shortly thereafter, the Bank secured a no-objection from the Central Bank of Bahrain in August 2024, followed by final approval from CBK. The transaction is expected to be finalized during the first three months of 2025.