Kuwait-listed Gulf Bank and Warba Bank have agreed to undertake a feasibility study and due diligence on a proposed merger.
The two banks announced the decision in disclosure to the local stock exchange on Monday, following which their shares were suspended for one hour under the capital markets bylaws.
The potential merger offers growth and expansion opportunities, as well as building competitiveness of the Islamic banking sector, the statement said.
Last year, Gulf Bank was linked with a merger with Boubyan Bank, another local institution, according to stock exchange statements. Kuwait Finance House, an Islamic lender, has taken over the local Ahli United Bank, as part of KFH’s acquisition of Bahrain’s Ahli United Bank.
The Gulf Bank’s board approved the feasibility study after receiving Warba Bank’s request for potential merger.
The two banks are now awaiting the central bank’s directions to move forward, they said in separate statements.
Gulf Bank’s reported total assets of KD7.5 billion, up 4 percent year on year, as of December 31, 2024. The bank reported a net profit of KD60 million ($195 million) in 2024, down 16 percent annually. The stock closed at KD0.338 on Sunday, up 9 percent in the year to date.
Meanwhile, the total assets of Warba Bank reached KD5.3 billion, rising 10 percent year on year, by the end of last year. Net profit rose 14 percent annually to KD22.4 million in 2024. The stock closed at KD0.234 on Sunday, up by 32 percent in the year to date.
Last month it was reported that Kuwaiti banks were the most profitable within the listed companies in Kuwait last year, with profits exceeding 63 percent of the total.
Global rating Fitch has said that the approval of a debt law and the easing of housing curbs on foreigners are likely to stimulate banks after a period of subdued activity.
