• With combined assets totaling KD 16.32 billion, based on first-half 2024 data, the merger between Gulf Bank, Boubyan Bank signals a new era of heightened competition in the Kuwaiti banking sector.
• Boubyan Bank’s unprecedented technological advancements have established a strong presence, leading to notable successes recognized both locally and abroad.
• Gulf Bank emphasized that the merger is part of its efforts to adopt new methods and strategies aimed at fostering growth and prosperity.
Gulf Bank and Boubyan Bank have announced their approval of a merger study, setting the stage for the creation of a major Islamic banking entity. With combined assets totaling KD 16.32 billion ‘approximately $53.4 billion, based on first-half 2024 data’, this merger signals a new era of increased competition in the Kuwaiti banking sector, according to Al Rai newspaper.
What happened was not a matter of chance but rather the result of significant work and effort by both banks. Their aligned visions and shared goals facilitated the merger discussion. As large, independent entities, both banks were well-prepared for such a development.
Gulf Bank has recently attracted attention from the investment community, particularly following Engineer Bader Nasser Al-Kharafi’s appointment as chairman of the board. His leadership has highlighted the bank’s intention to operate in accordance with Islamic Sharia, marking the beginning of a new era aimed at fulfilling shareholders’ ambitions.
On the other hand, Boubyan Bank’s unprecedented technological advancements have established a strong presence, leading to notable successes recognized both locally and abroad. The desire to merge stems from a shared vision to support expansion plans locally and internationally within an independent framework that benefits the new entity.
Both Gulf Bank and Boubyan Bank are confident in their ability to complete the merger, which aims to create a major Islamic entity with a significant market share. This entity is expected to enhance its presence internationally through innovative solutions, thereby strengthening the Kuwaiti economy and increasing confidence in the financial system.
On a related note, Gulf Bank stated in an official announcement from Chairman Bader Nasser Al-Kharafito the Kuwait Stock Exchange that the merger proposal was introduced as part of the search for strategic growth and expansion opportunities. The bank’s board of directors approved the proposal at its meeting on July 30.
He added that the Presidency Council has issued directions and recommendations to proceed with the necessary practical steps to begin the preliminary feasibility study of the merger process and conduct a thorough examination, pending the required approvals.
He mentioned that the Central Bank provided Gulf Bank with the necessary procedures to follow during the merger process. He added that Gulf Bank will coordinate with Boubyan Bank to sign a memorandum of understanding and a confidentiality agreement in preparation for the initial feasibility study.
The bank confirmed its commitment to all relevant laws and instructions, including obtaining any required approvals from the Central Bank of Kuwait and other regulatory authorities. This includes securing the Central Bank’s approval to appoint advisers before starting the feasibility study for the merger. Gulf Bank will also disclose any significant developments in this matter as they occur.
Gulf Bank emphasized that this step is part of its efforts to adopt new methods and strategies aimed at fostering growth and prosperity. This includes analyzing all opportunities and cooperation avenues to achieve Gulf Bank’s goals of sustainable growth and added value for the bank, its customers, and investors.
In the same context, Boubyan Bank, in a disclosure signed by Deputy Chairman and CEO Adel Al-Majid and addressed to the stock exchange, announced the initiation of a feasibility study to create a single banking entity with Gulf Bank, compliant with Islamic Sharia.
The disclosure stated that this step aligns with Boubyan’sefforts to seek promising strategic opportunities for growth and expansion at local, regional, and global levels.
Boubyan Bank stated that, “In light of the discussions between the two banks regarding the proposal to study the creation of a single banking entity compliant with Islamic Sharia through a merger process, the Board of Directors of Boubyan approved the proposal after examining all its aspects and dimensions.”
He also noted the importance of complying with relevant laws and regulations, including obtaining any necessary approvals from the Central Bank and other regulatory authorities, and appointing advisers before commencing the feasibility study.
Gulf Bank and Boubyan Bank’s combined market value hits KD 3.67 billion
According to the stock exchange’s figures from Wednesday, the combined market value of Gulf Bank and Boubyan Bank is KD 3.67 billion.
Gulf Bank’s market value is approximately KD 1.183 billion, with a capitalization of about KD 486 million. Boubyan Bank’s market value is KD 2.487 billion, and its capitalization is KD 420 million.
With the approval of both Gulf Bank and Boubyan Bank councils, the merger is progressing to a new stage. This will be accompanied by the continued transformation of Gulf Bank into an Islamic bank.
Information suggests that the merger may not alter the ownership structure of the two banks. Currently, NBK owns about 60 percent of Boubyan Bank, while the Al-Ghanim Koutaiba Group owns 32.75 percent of Gulf Bank.
The news of the merger was reflected in yesterday’s trading activity on the stock exchange. Transactions for Gulf Bank and Boubyan Bank shares saw significant activity, with trading for both stocks totaling KD 31.8 million out of KD 85.2 million in liquidity for the first and main markets.
Gulf Bank shares traded for KD 23.7 million, with 75.74 million shares exchanged through 1,985 transactions, while Boubyan Bank shares traded for KD 8.08 million, with 13.68 million shares exchanged through 1,479 transactions.
