Burgan Bank Receives CBK Approval To Acquire Bahrains UGB

The mandatory closing formalities for the transaction are expected to be completed by the first quarter of 2025.

UGB is a licensed conventional wholesale bank. Established in 1980, it operates under a conventional wholesale banking license from the Central Bank of Bahrain.

The purchase price of this transaction has been settled at $190 million, which roughly translates to 1.0x of UGB’s current shareholders’ equity or book value. The acquisition is expected to impact Burgan Bank’s regulatory capital ratios by 60 to 70 basis points, predominantly due to the consolidation of UGB’s assets. The final impact will be determined at the closing of the shares’ transfer.

UGB also has a 60 per cent stake in Kamco Investment Company (Kamco Invest), its core subsidiary incorporated in Kuwait. Kamco Invest provides a comprehensive range of investment products and services in asset management, investment banking and brokerage.

Tony Daher, Group Chief Executive Officer at Burgan Bank, the bank’s efforts to achieve sustainable growth and implement expansion plans are guided mainly by its vision to become the most modern and progressive bank in Kuwait.

Daher commented: “The 100 per cent acquisition of UGB aligns with our new asset reallocation strategy and efforts to build new and diversified revenue streams.

“This transaction would benefit Burgan by providing access to KAMCO Invest’s platform to further drive its non-interest income. Additionally, it will help expand the bank’s footprint across the GCC region while contributing to bolstering potential revenues and synergies through UGB’s banking license.”

Burgan Bank announced in June this year that it had received CBK’s initial approval to engage with Bahrain’s regulatory authorities regarding the acquisition of a 100 per cent stake in UGB. Shortly thereafter, the bank secured a no-objection from the Central Bank of Bahrain in August 2024, followed by final approval now.

Both Burgan Bank and UGB are the banking arm of Kuwait Projects Company (KIPCO Group), one of the largest holding companies in the MENA region.

As on 31 December 2023, UGB’s consolidated assets under management totaled $14.3 billion.

Established in 1977, Burgan Bank is one of the leading banks in the country, and is served in the MENAT region by its majority-owned subsidiaries, collectively known as the ‘Burgan Bank Group’. This includes the Gulf Bank Algeria (AGB, Tunis International Bank (TIB) and Burgan Bank Turkey.

In the full year 2023, Burgan Bank’s total revenue was KD222 million ($720.4 million), while total assets stood at KD7,426 million ($24.1 billion).