Boubyan Bank, leading Kuwaiti Islamic lender, said it plans to raise its capital to $609 million as it seeks to expand in Kuwait, after it received the central bank's approval for the move.

Boubyan's board has recommended to increase its capital by 50 per cent, at 250 fils ($0.87) per share including premium, the bank said on Tuesday in a statement.

This would raise the bank's capital to about KD174.8 million ($609.3 million), according to Reuters calculations.

The new shares will be sold to existing investors and the recommendation is subject to the shareholders' approval, the bank said. There are 1,000 fils to the dinar.

The move aims to strengthen the bank's financial position, Boubyan said in the statement.

"This is to support the development, operational expansion and progress of the bank in the next stage in Kuwait," said Boubyan's spokesman.

Last month, the bank said it has appointed a new chief executive after National Bank of Kuwait, the country's biggest by market value, became the largest shareholder in Boubyan owning a 27.55 per cent stake.

The management change could benefit Boubyan, which has faced a wave of resignations in February with all board members stepping down without giving a reason, analysts said.

Boubyan Bank, which complies with Islam's ban on interest, competes with larger rival Kuwait Finance House and Kuwait International Bank.

Boubyan's stock was up 7.22 per cent on Tuesday. – Reuters