Burgan joins Gulf banks flirting with local lenders

This photo shows a Burgan Bank billboard. Burgan Bank runs the trade activities for Kuwait’s largest investment firm KIPCO, which is partly owned by the Kuwaiti Amir. Company photo

Kuwait’s Burgan Bank has reached a deal to acquire Greek Eurobank EFG’s 70 percent stake in Turkey’s Eurobank Tekfen, according to an undisclosed source close to the matter who spoke with Reuters.

According to the same source, Burgan Bank will also have the option to purchase the remaining 29.26 percent of Tekfen’s stake.

An official announcement is expected to be made in one to two weeks, but the price is most likely to be based on shareholder’s equity.

In its Sept. 30, 2011 balance sheet, Eurobank Tekfen posted a net profit of 20.3 million Turkish Liras and had 608.3 million liras in shareholder equity.

For the same period, Tekfen with a balance sheet of 5.1 billion liras, posted cash loans worth 2.3 billion liras and deposits of 2.2 billion liras.

KIPCO the parent firm
Burgan Bank runs the trade activities for Kuwait’s largest investment company, Kuwait Investment Projects Company ( KIPCO.)

KIPCO also has a stake in United Gulf Bank and other financial firms in the Middle East and North Africa. The Kuwaiti amir and his family own 44.63 percent of KIPCO, according to Reuters.

Burgan Bank was established in 1977.

The lender is active in the retail, corporate and investment banking sector.

Its subsidairies include Gulf Bank Algeria, Bank of Baghdad, Jordan Kuwait Bank and Tunis
International.

Greek woes trigger sale
Due to the Greek economy’s debt crisis, Eurobank EFG had decided in July 2011 to sell its share in Turkey’s Eurobank Tekfen. Eurobank.

EFG had purchased 70 percent of Tekfen Finansal Kiralama back in 2006 bringing the bank’s value to $260 million.

In September Tekfen had announced that in the event of an undesirable partnership, Tekfen was willing to sell its remaining 29 percent stake in the bank, according to Reuters.

QNB in talks for Denizbank
Recently, there has also been much talk that Qatar National Bank (QNB) is eyeing Denizbank, the fast-growing Turkish arm of eurozone debt casualty Dexia, in a deal potentially worth up to $6 billion, people familiar with the matter said.

QNB, 50 percent of which is owned by sovereign wealth fund Qatar Investment Authority, would be the latest Qatari interest in Dexia’s assets after the Gulf state’s royal family bought Banque Internationale Luxembourg, a private bank.

Qatar’s al-Thani royal family also runs investment groups including QIA, which has invested in European banks including Barclays in the past.