Kuwait’s KFH reportedly plans to acquire a stake in Saudi Investment Bank

Kuwait Financial House (KFH) is reportedly considering buying a ‘significant’ stake in Saudi Investment Bank, a bank with a market capitalisation of $4.4bn (SAR16.3bn), as merger and acquisition (M&A) activity heats up in the Middle East region.

Sources familiar with the matter told Bloomberg that KFH has been studying a potential investment to help bolster its regional presence. The banking behemoth completed its merger with Ahli United Bank—Kuwait in February, following its $11.6bn cross-border acquisition of Ahli United Bank—Bahrain in July 2022.

The Kuwaiti lender’s quarterly net profit rose marginally by 0.5 per cent to $529.6m (KWD162.8m) compared to KWD162.1m for the same quarter a year ago, driven by an increase in income generated from the main activities of the banking group.

Operating revenue for the first three months of the year came in at KWD392.4m, up 3.5 per cent from KWD379.1m in the same period of 2023. KFH’s total assets rose by 0.5 per cent to KWD37bn.

Deliberations between KFH and Saudi Investment Bank are reportedly ongoing but there is no certainty that they will result in a deal. Saudi Investment Bank previously counted JPMorgan Chase as one of its biggest shareholders until the US bank sold off its stake in 2018.

Consolidation continues to be an essential part of the transformation journey across the GCC region’s banking system and has the potential for further synergies in creating banks with greater scale to support National Visions and in terms of revenue and cost synergies.

Earlier in May, UAE’s First Abu Dhabi Bank (FAB) was linked with a possible acquisition of Turkish conglomerate Koc Group’s 61.2 per cent stake in Istanbul-based lender Yapi Ve Kredi Bankasi (Yapi Kredi).

However, a deal between FAB and Yapi Kredi was hampered by disagreements over price.

Read: UAE’s FAB reportedly in advanced talks to acquire Yapi Kredi