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Kuwait Finance House Explores Bid for Stake in Saudi Investment Bank

Vinicy Chan, Dinesh Nair and Jan-Henrik Förster
·2 min read

(Bloomberg) -- Kuwait Finance House KSCP has been exploring the purchase of a significant stake in Saudi Investment Bank as dealmaking activity heats up in the Middle East, according to people familiar with the matter.

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The Kuwaiti lender has been studying a potential investment to help bolster its regional presence, the people said, asking not to be identified as the information is private.

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Shares of Saudi Investment Bank jumped as much as 4.9% in Riyadh trading Tuesday. They were down 0.3% at the close, giving the company a market value of about $4.2 billion.

KFH said in an exchange filing Tuesday that it’s evaluating potential expansion opportunities in Saudi Arabia and is still studying more than one bank. No agreement has been signed with any Saudi lender, it said. Shares of KFH, which were halted from trading pending the announcement, rose as much as 1% after they resumed trading early afternoon in Kuwait.

Deliberations are ongoing and there’s no certainty they will result in a deal, according to the people. A spokesperson for Saudi Investment Bank didn’t respond to requests for comment.

Banking consolidation has picked up across the Middle East as lenders have sought to gain more scale in order to better compete with rivals. One of the last major deals also involved KFH, which agreed in 2022 to acquire Bahrain’s Ahli United Bank following nearly four years of negotiations. National Bank of Bahrain BSC said Tuesday it has hired Goldman Sachs Group Inc. as financial adviser as it weighs a potential merger with local rival BBK BSC.

Saudi Investment Bank previously counted JPMorgan Chase & Co. as one of its biggest shareholders until the US bank sold off its stake in 2018.

--With assistance from Nicolas Parasie, Fiona MacDonald and Matthew Martin.

(Updates share moves in third paragraph and adds details on more bank consolidation in the Middle East in sixth paragraph.)

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