Business | Banking
Kuwait's Burgan plans first foreign acquisition
Kuwait's Burgan Bank said it plans to make its first foreign acquisitions within as little as a year to offset rising competition at home and may find it tough to meet its 2008 profit target.
- Reuters
- Published: 00:05 April 7, 2008
Kuwait City: Kuwait's Burgan Bank said it plans to make its first foreign acquisitions within as little as a year to offset rising competition at home and may find it tough to meet its 2008 profit target.
The bank is considering making acquisitions in North African countries such as Egypt, Algeria and Mauritania, and in the Middle East in places such as Syria and Iraq, CEO Jonathan Lyon said.
Burgan would be the latest Kuwaiti lender to look abroad because of increasing rivalry at home, where foreign players such as Citigroup and BNP Paribas have entered the fray.
Market leader National Bank of Kuwait acquired Al Watany Bank of Egypt and bought a 40 per cent stake in the Turkish Bank to expand abroad.
"The region itself is expanding," Lyon said. "There are certain countries that have very high demographic structures that require financing."
Burgan aims to generate half its revenue from foreign operations within five years, Lyon said, declining to be more specific about his acquisitions plans. The bank now operates only in Kuwait, the world's seventh-largest oil exporter.
"Hopefully, something will be completed within a year to 18 months," Lyon said. "We are seeking majority stakes."
Commercial services
Burgan owner Kuwait Projects said last month it wants to set up a dedicated investment banking and asset management unit and another that provides other commercial services, such as retail and corporate.
This could involve Burgan buying the non-investment banking assets of Bahrain's United Gulf Bank, said Naser Al Nafisi, general manager of Kuwait Al Joman Centre for Economic Consultancy.
"This is among the presented scenarios," Al Nafisi said. "Or there could be a merger between the two banks."
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