Bloomberg reported that Kuwait Finance House (KFH) is interested in acquiring a substantial stake in Saudi Investment Bank (SAIB) (1030).
Details
The sources Bloomberg cites said the Kuwaiti bank is studying the potential acquisition to strengthen its regional presence.
The deal could be valued at up to USD 1.7 billion, according to reports circulated in Kuwaiti local press earlier this month.
This comes amid increased deal-making activity in the Middle East as a whole.
So What
Shares of Saudi Investment Bank saw an approximately 4.9% uptick at the commencement of market trading on Tadawul Tuesday.
This marks the company’s largest share value hike in two years.
Meanwhile, the main Kuwaiti stock exchange (Boursa Kuwait) has suspended trading of KFH stocks pending disclosures on the acquisition news.
Comparatively, SAIB shares have been relatively stable this year, maintaining a market value of about USD 4.3 billion.
On the other hand, SAIB’s net profit grew 8.2% YoY in the first quarter of the year, reaching SAR 442.4 million.
Some Context
JPMorgan was one of the largest shareholders in SAIB before the American banking giant sold its stake in 2018.
Bank mergers have accelerated across the Middle East as lenders seek to grow and gain competitive leverage.
One of the recent notable deals in our neck of the woods was when KFH purchased Bahrain’s Ahli United Bank in 2022 following about four years of negotiations.
