Kuwait’s largest lender Kuwait Finance House (KFH) is reportedly exploring the purchase of a ‘significant’ stake in Saudi Investment Bank (SAIB).

The move is a part of the financial institution’s plan to bolster its regional presence as investment activity heats up in the Middle East, Bloomberg reported, citing people familiar with the matter.

In May, the Saudi Tadawul-listed SAIB posted Q1 net profits of 442.40 million Saudi Arabian riyals ($), indicating an 8.19% uptick from SAR 408.90 million reported in Q1 2023.

Spokespeople for KFH and the SAIB didn’t respond to requests for comment by Bloomberg.

Investment activity in the region’s banking sector has been on the rise, with Saudi Arabia’s Riyad Bank, the kingdom’s third biggest lender by assets, announcing to its board in April that it was considering an initial public offering of its investment banking arm, Riyad Capital.

KFH itself has been at the centre of some of the biggest banking deals in the region. Following its acquisition of Ahli United Bank – Bahrain in 2022, in February of this year, KFH announced the successful completion of its merger with Ahli United Bank – Kuwait (AUB-Kuwait), including the stock swap of KFH capital’s increase with the shareholders of AUBK.

(Writing by Bindu Rai, editing by Seban Scaria)