NBK raises stake in Boubyan to 40%

BANK STAKE: NBK has increased its stake in Boubyan Bank to 40 percent. (ITP Images)

National Bank of Kuwait has raised its stake in Islamic lender Boubyan Bank to 40 percent, as it seeks to boost its Sharia-compliant business, an NBK spokesman said on Tuesday.

NBK, the country's biggest lender by market value, has bought Securities Group Co's 7.2 percent stake in the Islamic lender, the spokesman said.

"We have reached 40 percent in Boubyan. We want Boubyan to become the Islamic banking arm of NBK but as a totally independent bank," he said.

He declined to say how much NBK paid for the stake.

In July NBK and Securities Group bought in an auction shares in Boubyan held by the Kuwait Investment Authority (KIA), the OPEC member's sovereign wealth fund.

Securities Group bought 77 million shares in the auction at 560 fils per share, according to previous statements.

Earlier this month Boubyan said it plans to raise its capital by 50 percent as it seeks to expand in Kuwait, after it had appointed a new chief executive in August.

Islamic banking is one of the world's fastest growing financial sectors, rising 15-20 percent a year, according to industry estimates.

Boubyan Bank, which complies with Islam's ban on interest, competes with larger rival Kuwait Finance House and Kuwait International Bank.

On Monday Kuwait's cabinet approved a new Islamic lender, with capital of 100 million dinars ($349m).

Boubyan's stock fell 3.33 percent on Tuesday, trading at 580 fils a share. There are 1,000 fils to the dinar. (Reuters)

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