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Burgan Bank to relaunch plan to boost capital

Sheikh Salem Abdul Aziz Al Sabah (SUPPLIED)

By Reuters

Kuwait's Burgan Bank will relaunch plans to increase capital and will go ahead with the purchase of foreign assets from Bahrain's United Gulf Bank, Burgan's Chief Executive said yesterday.

"We're going to go back now and start the process again," Chief Executive Jonathan Lyon said.

Plans to boost capital last year by 200 million Kuwaiti dinars (Dh2.58bn) failed due to a technicality, he said.

Kuwait's Emir did not issue a decree to approve the hike in capital before a deadline of December 31, 2008, he added.

"It's a long bureaucratic process and the Emir's decree was the only missing piece," Lyon said.

Burgan, a unit of investment firm Kuwait Projects Co (Kipco), said in a statement earlier to Kuwait's bourse that it has halted the plans for a capital increase.

In May, Burgan agreed to purchase the foreign assets of UGB, another unit of Kipco, for KWD194m.

The acquisition was part of a push by Burgan to move outside of its home market for the first time.

The purchase of UGB assets gives Burgan a stake in the Bank of Baghdad, Algeria Gulf Bank, Jordan Kuwait Bank and Tunis International Bank.

Kuwaiti Central Bank Governor Sheikh Salem Abdul Aziz Al Sabah said Kuwaiti banks were expected to post their 2008 results by next week.

"Some banks have sent us incomplete financial data and we are following up with them now to approve their data promptly," he said.

Banks were expected to release their financial earnings this week but none of Kuwait's lenders posted their fourth-quarter profits yet.

Other Gulf countries have already seen banking and firms reporting their earnings.