The Kuwait-listed Gulf Bank has received initial approval from the country’s Central Bank to convert its operations to an Islamic banking institution.
The news comes even as Gulf Bank is exploring a potential merger with the Kuwait-based Warba Bank.
The move by Gulf Bank is being seen by many as a percussor to its merger with Warba Bank, which could lead to the creation of one of the largest Shariah compliant banks in Kuwait.
Warba Bank, which has assets of about 6 billion dinars, acquired a 32.75% stake in Gulf Bank in April for about $1.63 billion, and the two began initial steps the following month towards a merger.
A merger between Gulf Bank and Warba Bank would create the third largest financial institution after KFH and NBK, with total assets reaching 13 billion Kuwaiti dinars ($42.5 billion).
Warba is set to gain from Gulf Bank's strong retail business and its more than 50 branches, taking the combined network to about 70 and creating an institution with the largest branch network in Kuwait.
