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Gulf Finance House' shares are listed in Bahrain, Kuwait and on DFM. The Al Khaleeji Commercial Bank gives GFH considerable clout when it comes to tapping new clients, new markets. Image Credit: Gulf News Archive

Dubai: Bahrain investment bank Gulf Finance House (GFH) is in the final stretch to pick up full ownership of Khaleeji Commercial Bank, in what will be one of the bigger consolidations within the Gulf’s finance sector this ear.

GFH will pick up the remaining 21.03 per cent stake in Al Khaleeji – which too is based in Bahrain - not owned by it through a share swap arrangement. This will be done through buying 187.58 million shares.

“GFH intends to maintain KHCB’s vocation as an Islamic retail bank,” it said in a statement. “KHCB will continue to operate under its normal course of business and maintain its operations as a subsidiary of GFH.”

Why Al Khaleeji is a good fit
KHCB will provide GFH with a wider segment of clients and allow for a bigger market share.

The commercial banking credentials that KHCB brings provides “stability” to GFH’s profitability and risk profile, and which is why the deal is considered a “key pillar” to GFH’s strategic growth plan.

All clear from shareholders

GFH, which has redoubled efforts to expand its portfolio aggressively this year, has secured approval from shareholders to go ahead with the buy. Through the approval, GFH will issue its treasury shares as swap for Al Khaleeji’s. (In the past 12 months, GFH acquired 121.72 million KHCB Shares representing 13.64 per cent of its shares.)

Once GFH gets confirmation for ownership of 90 per cent of Al Khaleeji, then the takeover madate automatically kicks in, making the Bahrain company speed up move towards full ownership. “The remaining sdhareholders who have not accepted the acquisition offer shall be obliged to sell their shares no later than three months from the date of GFH having obtained 90 per cent or more acceptances,” GFH said in a statement.

GFH, which has a paid up capital of $1 billion, has its shares listed on the Bahrain, Kuwait and Dubai stock markets. Its latest financial results show the company returning to health after a tough time of it in 2020.