National Bank of Kuwait said it has agreed to buy 40 percent of Turkish Bank for $160 million.

National Bank said in May it was in talks to take a 30 percent stake in privately-owned Turkish Bank, with an option to increase that to 40 percent.

The deal would depend on approval by Kuwaiti and Turkish authorities, National Bank said in a statement on the Kuwait bourse Web site.

A quarter of the $160 million would be invested in increasing the capital of Turkish Bank, an NBK official told Reuters.

National Bank shares were up 0.9 percent higher at 2.200 dinars at 0921 GMT.

Like other Gulf banks riding an economic boom on the back of a tripling in oil prices since 2002, National Bank is growing abroad to offset competition at home, where foreign players such as HSBC Holdings and BNP Paribas SA are expanding their presence.

 Turkish Bank has 17 branches and ended the year with total assets of 649 million Turkish lira ($481.2 million). National Bank wants to increase its branch network five-fold in two years, the official said.

Turkey has seen a string of foreign acquisitions of its banks in recent years with purchases from European and US institutions.

Kuwait Investment Authority, which invests the Gulf Arab state's budget surpluses, bought a 2.7 percent stake in the initial public offering of state lender Halkbank in May.

This month, Saudi Arabia's National Commercial Bank, the Gulf's largest lender by assets, agreed to pay $1.08 billion for 60 percent of privately owned Turkish Islamic lender Turkiye Finans. -Reuters