Saudi lender linked with Gulf Bank takeover

TAKEOVER TALK: An unnamed Saudi lender plans to buy a significant stake in Gulf Bank, newspapers reported. (Getty Images)

A Saudi lender plans to buy a stake in Kuwait's troubled Gulf Bank, which received emergency support after being hit by derivatives losses, two Kuwaiti newspapers said on Sunday.

Al-Qabas newspaper said a Saudi bank was in talks with Gulf Bank's major shareholders to buy a significant stake and Al-Watan newspaper said a Saudi financial group might propose to buy a majority stake after securing central bank approval.

Both newspapers did not disclose the sources of the information.

Kuwait's government could also buy up to 35 percent in Gulf Bank through a capital hike if shareholders could not secure the funds, Al-Qabas said.

Al-Watan said the potential Saudi buyer aims to transfer the bank into an Islamic lender.

Last month, the central bank stepped in to support Gulf Bank after it was hit by derivatives losses and appointed a treasury supervisor for Gulf Bank and guaranteed deposits.

Gulf Bank said on Thursday the extent of its currency losses was being studied by external auditors.

The bank has said it was considering all options, including a capital increase. Finance minister Mustapha Al-Shamali said in late October the government would invest in the capital hike if the bank's shareholders failed to secure the funds. (Reuters)

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