KFH eyes 20pc capital hike
Kuwait, November 27, 2012
Kuwait Finance House (KFH), the Gulf state's largest Islamic lender, will recommend a 20 percent capital hike to shareholders, the company said in a bourse filing on Tuesday, which will help boost capital ratios and fund expansion.
The company's board of directors decided on Monday to make the recommendation when it holds its annual general meeting, with proceeds to fund the bank's expansion both at home and internationally, KFH said.
Any capital issue also requires approval from the country's regulator. A potential capital increase will boost KFH's paid-up capital to 348.5 million dinars ($1.24 billion) from 290.4 million dinars, Al Watan newspaper reported on Tuesday.
The price at which new shares will be sold during the capital increase, which is part of the bank's five-year strategic plan, will be determined at a later date, it added.
Shares in KFH were up 1.2 percent at 0.82 dinars at 0705 GMT, trimming year-to-date losses to 1.6 percent.
Kuwaiti banks have suffered since the global financial crisis because of exposures to the local real estate and stock markets whose values have dropped significantly, as well as to investment firms which borrowed heavily in the boom years to finance activity in the two areas.
In September, Fitch Ratings said it had downgraded KFH's viability rating because of concerns over asset quality and loan concentration at the lender, while its Tier 1 capital - a key measure of a bank's reserves - lagged its Kuwaiti peers.
However, the agency said at the time a planned capital hike to bolster reserves would be a positive step.
In November, Moody's placed all of KFH's ratings on review for possible downgrade, with concerns over asset quality also central to the move. - Reuters
More Finance & Capital Market Stories
- Mena inbound M&A value triples to $3.9bn
- DFM opens educational trading floor at varsity
- Egypt urban inflation hits 4-year high in Nov
- Adib honoured for SME support services
- Saudi rallies ahead of 2014 budget speech
- Qatari oil, gas to have limited impact on GDP growth
- Xerox Emirates, Asseco offer banking solutions
- Omani bank rolls out home finance products
- NBAD steps up hiring ahead of Expo boom
- Acuma names new UAE head