Kuwait’s KFH offloads entire stake in Sharjah Islamic Bank for Dhs1.3bn

Kuwait Financial House (KFH Group) has sold an 18.18 per cent stake in Sharjah Islamic Bank for $351m (Dhs1.3bn), the banking group said on Tuesday.

KFH said in a bourse filing that the shares were sold to the Endowment of Sheikh Sultan bin Mohammed bin Saqer Al Qasimi, the Sharjah Social Security Fund and Sharjah Islamic Bank.

The Kuwaiti lender sold 588 million shares at a price of Dhs2.20 apiece.

The Shariah-compliant bank said the “off-market sale and transfer of shares” is contingent upon receiving “regulatory approvals”.

KFH said its Q3 2024 financial statements would reflect the financial impact of the deal, which is expected to have an immaterial effect on the group’s income statement.

The banking group’s first-half profit rose marginally by 2.3 per cent to $1.1bn (KWD341.2m) compared to KWD333.4m for the corresponding period a year ago. KFH’s total assets plunged by 4.2 per cent to KWD36.4bn from KWD38bn in H1 2023.

KFH has been focusing on consolidating and expanding in the GCC and the wider regional markets.

The bank said in June that it was “conducting careful studies” for potential expansion opportunities into Saudi Arabia following reports that the banking group was considering buying a majority stake in Saudi Investment Bank. It said a study into the potential acquisition of a stake in the Saudi Investment Bank, as well as other studies to expand its regional footprint, “contributes to supporting KFH’s growth”.

“The recent increase in Kuwaiti bank mergers and acquisitions is credit positive for the sector, particularly as the market is overbanked,” Fitch Ratings said in a commentary in August.

Boubyan Bank, Kuwait’s second-largest Islamic bank, and Gulf Bank, the country’s fifth-largest bank overall, said in July that they are exploring a potential merger.

Read: Kuwait’s KFH explores Saudi M&A deals in regional expansion drive