KUWAIT: Burgan Bank Group (BBG) announced yesterday the sale of Jordan Kuwait Bank to subsidiary of the Kuwait Projects Company (KIPCO) Group. Since 2010, Burgan Bank has undertaken a number of steps to enhance its capital, similar to actions taken by leading banks in the world as a result of the introduction of Basel III. These measures included selling treasury shares, issuing new capital via a rights issue, as well as a series of subordinated bond issues.
The sale yields a reduction of over KD 500 million in Burgan’s risk-weighted assets. The resultant capital adequacy ratio is forecast to be in excess of 15% at the end of 2015. Majed Essa Al-Ajeel, Chairman of Burgan Bank, commented: “This move has positioned the bank with capital levels comfortably in excess of that required under the Basel III regime. It also gives us capacity to grow for the next few years without the need for further capital.” “The transaction reflects the unique opportunity we enjoy as part of a strong group like KIPCO. It demonstrates our flexibility, strategic optionality, as well as the strong support of our main shareholder,” concluded Al-Ajeel.
On his part, Eduardo Eguren, Burgan Bank’s Group Chief Executive Officer, commented: “This capital friendly solution allows us to strengthen our focus on execution and further improve our earnings,” Eguren added. “Jordan Kuwait Bank is a great asset that will remain part of the KIPCO Group, allowing us to keep our link to such a well-run bank. Being members of the same diversified Group, we will continue our strong support and close cooperation with Jordan Kuwait Bank,” concluded Eguren.