Kuwait Finance House (KFH) held its Extraordinary General Assembly Meeting to ratify the merger by amalgamation project between Kuwait Finance House (the merging company) and Ahli United Bank (the merged company). The meeting was held at KFH`s Headquarters on November 29, 2023, with an attendance rate of about 78.6%. The assembly ratified the project and all agenda items.

KFH Chairman, Hamad Abdulmohsen Al Marzouq, who chaired the General Assembly, said: “On behalf of myself and my fellow Board Members of KFH, we are pleased to welcome the shareholders, and we thank them for their keenness to attend the Assembly in person or electronically.

Al Marzouq added: “The implementation of the first phase of the acquisition project of AUBK has been completed through the mandatory offer submitted by KFH to the rest of the shareholders of AUBK in accordance with the law and the instructions of the Capital Markets Authority and the competent regulatory authorities. This resulted in KFH acquiring an additional percentage of AUBK's capital shares equivalent to 18.258%. Additionally, the KFH Group became a direct and indirect owner of 95.065% of the capital shares after excluding treasury shares, compared to a minority shareholder` percentage ownership of 4.935%”.

The Board of Directors of the two banks recommended to their respective General Assemblies to merge AUB-Kuwait with KFH by amalgamation, in view of the following: the aforementioned high ownership percentage, the local and regional market conditions, the intensity of competition where there is no place for small banks, and the lack of feasibility for AUB to continue as an independent bank providing the same services as the parent bank (KFH) in the same local market. The merger will achieve a definite benefit for the shareholders of the two banks through significant synergies, rationalization of administrative expenses, and many other advantages, especially those related to rationalization of the cost of funds. This will reflect positively on KFH`s profits in the medium and long term.

“The vast majority (equivalent to 889,974,356 shares) of the 931,366,802 shares proposed for implementing this acquisition, according to the proposed exchange rate, will be directed to KFH as treasury shares, as it is the largest owner in AUBK. The remaining 41,392,446 shares will also be allocated to the minority shareholders in the aforementioned bank. There will not be any material negative impact on KFH’s earnings per share as a result of this issuance. It is expected that the impact will be positive in the future, as I mentioned previously,” Al Marzouq added.

Record profits

Al Marzouq pointed out that KFH’s record profits and robust growth in all significant financial indicators confirm the success and efficiency of its strategy, the resilience of its business model and the importance and advantages of the acquisition deal. He noted that KFH has maintained outstanding ratios of profitability indicators, ROA, ROE, improving asset quality and the coverage ratio of provisions for non-performing debt, cost to income ratios and all principal financial indicators.

He added that KFH reported a record net profit for its shareholders of KD 461.5 million (USD 1.5 billion) up to the end of the third quarter of 2023, an increase of 124.3% compared to the same period last year. KFH showed its highest-ever quarterly profit in history, and the biggest in the Kuwaiti banking sector.

He noted that KFH is the largest bank in Kuwait and that it tops the list of companies listed on Boursa Kuwait in terms of market capitalisation and capital base, which means stronger capability of supporting companies and leading mega financing deals.

He added that KFH enjoys strong credit ratings and high liquidity levels which underpin its business growth and boost its financial and credit position locally and globally. It also enjoys wide geographical reach in Kuwait, Bahrain, Turkiye, Britain, Germany, Egypt and Malaysia and other geographies where KFH Group has a presence.

Al Marzouq affirmed KFH’s continuous efforts towards enhancing the role of the banking sector and strengthening its position through achieving profitability and sustainable growth. He reiterated that KFH enjoys a large capital base capable of providing the large financing required by national development projects.

Al Marzouq pointed out KFH is keeping up with developments in digitization, AI applications, innovative products, financing and investment solutions, the best investment in human resources, enhancing knowledge, attracting talent and national young banking competencies.

He also highlighted KFH`s role in supporting business entrepreneurship, offering banking and financing services to companies, supporting SME’s, enhancing harmony among the Group banks, carrying out strategic societal initiatives, boosting sustainability and green financing efforts, and linking investments to the sustainable development goals with the aim of strengthening KFH’s leading role globally.