Kuwaiti lenders Boubyan Bank and Gulf Bank are weighing a merger to create a single Islamic bank with $53bn in assets as part of a plan to fuel growth and expansion.

The boards of Boubyan Bank and Gulf Bank have approved the proposal, and the Central Bank of Kuwait was notified of their plans, the banks said in separate regulatory filings on Wednesday.

Boubyan Bank and Gulf Bank said they plan to sign a memorandum of understanding and a non-disclosure agreement to proceed with due diligence and valuation discovery in addition to studying the feasibility of the proposal.

Any transaction will be subject to approval from regulators, including the central bank, the filings said.

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