Kuwait Finance House to take three years to fully convert AUB to become Islamic bank

Kuwait Finance House will take up to three years to convert Ahli United Bank to become fully Shariah-compliant, Group CEO Mazin Saad Al-Nahedh told reporters on Monday (Jan 20).

KFH shareholders on Monday approved the acquisition of Bahrain’s Ahli United Bank (AUB). The acquisition is now subject to the approval of AUB’s extraordinary general assembly on the full acquisition of its shares based on the determined swap ratio of 2.325581 of AUB shares for 1 KFH share.

KFH will convert all of AUB’s conventional assets to become Islamic following the clearance of all approvals.

AUB’s Shariah-compliant assets in 2018 reached 43% of its “total budget”, said KFH Capital Investment Deputy Chairperson Shadi Zahran, according to a transcript of the press conference filed with Boursa Kuwait.

The Kuwaiti bank’s Group CEO said the first phase of AUB’s conversion will involve AUB-Bahrain and AUB-Egypt and will take between six and twelve months.

The conversion of AUB-Britain will also take the same period of time.

Al Nahedh said KFH expects to finish the whole process of conversion between 18 and 24 months, with full transformation taking three years.

The AUB name will be retained, said KFH, but the trademark might be changed in the future.

The merged bank will have assets of $101 billion and an annual profit forecast of $1.5 billion based on past performance, according to KFH.

For the most recent reported full-year results, KFH posted net profit of 227.4 Kuwaiti dinars ($749.12 million) in 2018, up 23.5%. AUB’s profit jumped 12.7% to $697.5 million in 2018.

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