Burgan Bank expects the sale to enable the bank to focus on its core market/iStock
by Kudakwashe MuzoriwaKuwait’s Burgan Bank has signed an agreement to sell its majority stake in Bank of Baghdad to Bahrain-based United Gulf Holding Company as the bank considers reducing group-wide non-performing loans, exit riskier assets and consolidate position in the domestic market.
In a bourse filing, Kuwait’s second bank by assets stated that the sale will enable Burgan Bank to focus on its core market and develop stronger synergies with its subsidiaries in Turkey, Algeria and Tunisia.
Additionally, Burgan Bank said that the sale of its ownership in the Iraqi lender is in line with its strategy to improve its risk-adjusted returns for shareholders.
The transaction is projected to have a one-off negative impact of around KWD 9 million (AED 108.8 million) on Burgan Bank's 2020 net income and part of this impact of around KWD 4 million is expected to be reversed after completion of the transaction, added Burgan Bank
However, despite this negative impact, Burgan Group expects to maintain its healthy level of profitability for the year 2020. Similarly, the bank stated that the deal is also expected to have a positive impact on Burgan's asset quality with a reduction in non-performing loans by around KWD 34 million dinars, without giving specifying total group-wide bad loans.
MOST READ
BUSINESS
COVID-19 poses downside risks to Egyptian banksBUSINESS
Fed rate cuts add pressure on Saudi banksBUSINESS
UAE firms launch Covid-19 economic aid packagesBUSINESS
Saudi Arabia plans to boost oil export to 10...BUSINESS
Aldar to invest AED 2 million in Abu Dhabi...BUSINESS
GCC UHNWIs population to grow by 26 per cent...BUSINESS
ING Groep plans to sell its Turkish unitBUSINESS
Bahrain considers stake sell in oil assetsBUSINESS
SEDCO Capital exits a US real estate investmentBUSINESS
NMC Health hires Moelis for debt restructuringBUSINESS
SABB seeks to boost corporate lendingBUSINESS
Dubai’s W Motors seeks funds to go electricBUSINESS
SHUAA Capital reports a net profit of AED 45...BUSINESS
HSBC considering exiting from TurkeyBUSINESS
Zimbabwe turns to UAE to sell a stake in...
CPI Financial was established in Dubai in 1999 to meet the needs of an ever-expanding financial community, offering a comprehensive portfolio of market-leading products and services tailor-made for the banking and financial services sectors.
Loading More post
