By Rebecca Bundhun
Kuwaiti bank remains confident it will purchase three banks, despite delay.
Kuwait’s Burgan Bank will push ahead with plans to purchase three regional banks from United Gulf Bank (UGB), both parties assured on Wednesday.
This is part of Burgan’s regional expansion strategy, announced in 2008, which involves the purchase of Jordan Kuwait Bank, Algeria Gulf Bank, Bank of Baghdad and Tunis International Bank from UGB.
"Despite the delay in completing the transaction with UGB, our regional expansion plans will continue during the course of 2009,” said Burgan Bank chairman, Tariq Abdul Salam.
Burgan Bank completed the purchase of UGB’s 44 percent stake in Jordan Kuwait Bank in 2008, bringing Burgan’s total stake in the bank up to 51 percent.
But its plans to buy the other banks have had to be put on hold after a decree authorising an increase in capital - needed to purchase the banks - failed to be approved in time.
"We regret that the delay in obtaining the decree is causing a delay in the finalisation of the transaction,” said UGB managing director, Masaud Hyatt.
“We will continue to implement the necessary procedures to make the deal happen, because we believe it is beneficial to both institutions and the markets they serve. As a result, we are confident the deal will be completed soon."