Kuwait’s Gulf and Al Ahli Banks announced on Tuesday that they are exploring prospects for one of them to acquire the other, with the potential to convert either of them into one Sharia-compliant financial institution.
In two separate statements to the Kuwait Stock Exchange, the two banks said that the managing directors will present the matter to the board of directors of both banks. They noted that the acquisition requires mandatory approvals from the Central Bank of Kuwait, as well as from relevant regulatory bodies, and the general assembly of both banks.
On Monday, Al Ahli Bank reported that the main shareholders at both banks had requested to explore a proposal to form a joint venture between the two financial institutions, under which both parties would be maintained, while one of them would be converted into a Sharia-compliant bank.
Al Ahli Bank said that it received a letter from both banks’ key shareholders, namely Behbehani Investment Company and Al-Ghanim Trading Company, noting that the request will be discussed before the bank’s board of directors.
Upon disclosure of the potential merger, Al Ahli Bank’s share price increased 0.6 percent to 316 cents on the Kuwait Stock Exchange, whereas Gulf Bank’s share price decreased by nearly the same amount.
