Kuwait’s Burgan Bank, the Gulf state’s second largest bank by assets, said on Sunday that it has signed an agreement to sell its 51.8 percent stake in Bank of Baghdad to Bahrain-based United Gulf Holding Company.

The deal would enable the bank to focus on its core local market as well its subsidiaries in Turkey, Algeria and Tunisia, it said in a bourse statement.

“Though the transaction is likely to have a one-time negative impact of around 9 million Kuwaiti dinars ($29.7 million) on the net income in 2019, part of this impact of around 4 million dinars ($13 million) is expected to be reversed after completion of the transaction,” Burgan said in the statement.

According to the bank, the deal will have a positive impact on the group’s asset quality with a reduction in the non-performing loans by around 34 million dinars ($112 million).

Burgan reported a 10.7 percent year-on-year increase in net income to 22.7 million dinars ($75 million) for the third quarter of 2019.

(1 US Dollar = 0.30 Kuwaiti Dinar)

(Writing by Nada Rifai; Editing by Anoop Menon)

(nada.rifai@refinitiv.com) 

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