Burgan Bank has successfully completed its capital increase through a rights issue of KD71.25 million ($235.43 million), which was oversubscribed 220%.
The issue to support the bank’s business growth and further strengthen its capital levels was well-received, and the transaction was oversubscribed, without the need for public offering or underwriting.
The bank offered 375 million shares in the rights issue which was concluded within 15 days. The capital increase process was led by Kamco Investment Company (Kamco Invest) as the Lead Manager and Subscription Agent, and Kuwait Financial Centre (Markaz) as the Joint Lead Manager and Underwriter.
With the completion of the capital increase, the bank’s issued and paid-up capital increased from KD275.625 million to KD313.125 million. The bank will use this capital increase to drive its growth strategy in Kuwait, its core market, and support cautious growth in its key subsidiaries’ markets as well as to increase its regulatory capital base.
Majed E Al-Ajeel, Chairman of Burgan Bank Group, commented on the success of the subscription process, saying: “We are thrilled by the great response from all shareholders throughout the subscription process, which resulted in unprecedented levels of demand with subscription levels of more than 220%. This achievement is evidence of the shareholders’ confidence in the bank’s strong financial position and its growth plans. I would like to commend the expertise and professionalism of Kamco Invest and Markaz, and thank the Central Bank of Kuwait, Capital Markets Authority, and Boursa Kuwait for their ongoing support and guidance, which collectively led to the successful outcome of this transaction.”
Masoud M J Hayat, Vice Chairman and Group CEO of Burgan Bank Group, added: “The capital increase will strongly support the bank’s strategy enabling it to achieve its growth plans, while improving both the financial and operational performance. Burgan Bank will continue to pursue its long-term transformation journey that focuses on recalibrating its operating model, enhancing its technological infrastructure, and accelerating its digital transformation plan, to maintain its competitive edge and grow its market share. The capital increase will also enable the bank to grow its credit facilities offerings to SMEs and corporate customers, effectively contributing towards driving economic growth in Kuwait.”
The bank’s most recent financial results showcased a solid financial performance, with a reported net income attributable to shareholders of KD40.3 million for the first nine months of 2021, with a strong growth of 23.6% compared to same period of the previous year.
The financial results also underscored solid operating revenue amounting to KD166.6 million, which were supported by high non-interest income of KD73.3 million (up 29.5% year-on-year), and the lower loan loss provision levels that improved by 11.6% compared to the same period in 2020.-- TradeArabia News Service