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Kuwait Finance House KSCP is exploring the purchase of a significant stake in Saudi Investment Bank as dealmaking activity intensifies in the Middle East, according to sources familiar with the matter. The Kuwaiti lender is considering this potential investment to strengthen its regional presence. Shares of Saudi Investment Bank surged as much as 4.9% in Riyadh trading on Tuesday but closed down 0.3%, giving the company a market value of about $4.2 billion. KFH mentioned in an exchange filing that it is evaluating expansion opportunities in Saudi Arabia and is studying multiple banks, with no agreements signed yet. Shares of KFH, which were halted pending the announcement, rose up to 1% after resuming trading in Kuwait.
- Deliberations are ongoing, and there is no certainty of a deal, the sources said. Banking consolidation is on the rise in the Middle East as lenders seek to scale up and compete more effectively. In 2022, KFH acquired Bahrain's Ahli United Bank after nearly four years of negotiations. National Bank of Bahrain BSC recently hired Goldman Sachs as a financial adviser to explore a potential merger with BBK BSC. Saudi Investment Bank previously counted JPMorgan Chase & Co. as a major shareholder until the US bank sold its stake in 2018.
Why it matters
Kuwait Finance House KSCP's potential acquisition of a stake in Saudi Investment Bank signals a growing trend of regional consolidation, aiming to create stronger, more competitive banking entities in the Middle East. This move could significantly reshape the financial landscape, offering enhanced services and stability to customers and investors alike.
