Boubyan rights issue to raise capital by 50%

Kuwaiti Islamic lender Boubyan Bank yesterday started a major rights issue aimed at raising its capital by 50 per cent, the bank said in a statement on the Kuwait Stock Exchange website.

The bank said the share price in the rights issue will be at a nominal value of 100 fils (Dh1.28) in addition to a premium of 155 fils.

The bank's current capital of KD116.6 million will rise to KD174.9m after the increase. The rights issue of 583 million new shares to raise KD148.6m will continue until February 7, the statement said. It will be open to current shareholders only.

The bank's shares were trading at 435 fils on Sunday. The emirate's largest lender, National Bank of Kuwait, holds a 40 per cent stake in the bank.

The oil-rich Gulf state of Kuwait has six conventional banks and three Islamic banks.

Unlike conventional banking, Islamic finance is based on the principles of Shariah or Islamic law, and charging interest on loans is regarded as usury. The system also bans dealings related to alcohol and gambling.

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