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The current stake of Burgan Bank in Bank of Baghdad after it bought an additional 5.3 per cent stake for $10.7 million as part of its plan to become a major regional player. (EB FILE)
Kuwait's Burgan Bank said it became a majority shareholder in an Iraqi lender as part of its plan to become a regional player.
Burgan, the commercial banking arm of investment firm Kuwait Project Company (Kipco), now owns a 50.6 per cent stake in the Bank of Baghdad after it bought an additional 5.3 per cent stake for $10.7 million (Dh39.3m), it said yesterday in a statement on the Kuwaiti bourse website.
The acquisition is part of a push by Burgan to move outside of its home market for the first time.
Several Kuwaiti lenders such as National Bank of Kuwait and Commercial Bank of Kuwait have been expanding abroad to offset rising competition at home where foreign players have entered the fray.
In 2008, Burgan agreed to purchase the foreign assets of Bahrain's United Gulf Bank, another unit of Kipco, for KD194m (Dh2.48 billion).
This gave Burgan stakes in the Bank of Baghdad, Algeria Gulf Bank, Jordan Kuwait Bank and Tunis International Bank.
Burgan, which was founded in 1977 and is mainly active in Kuwait, said last year it would relaunch plans to increase capital by KD200m as a way to fund the purchase.
The bank said in December it received the central bank's approval to raise its capital by KD36m.
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