(MENAFN- Kuwait News Agency (KUNA)) National Bank of Kuwait (NBK) announced here on Thursday that it has agreed to sell its 30 percent stake in International Bank of Qatar (IBQ) to Qatari investors in a transaction worth USD 538 million (KD 155 million).
By this deal, the NBK posted a direct profit of USD 87 million (KD 25 million) that is expected to be reflected in 2014 results. The sale is subject to customary conditions including regulatory approvals, a statement by the NBK said on Thursday.
NBK Chairman Nasser Al Sayer highlighted that this transaction is in line with NBK's strategy of owning and managing controlling stakes in entities in the MENA region with more focus on GCC markets, the statement added.
"We have decided to exit this partnership as we saw limited opportunity to increase our 30 percent ownership in IBQ to a controlling stake. This sale will also strengthen our capital position to pursue our regional expansion strategy and benefit from any opportunity in Qatar or any of the other GCC markets," Al Sayer said.
The statement noted that the NBK's investment in IBQ has been very successful, lasting more than 10 years and now it is exiting at an attractive price and after achieving excellent returns over the years.
For his part, NBK Group CEO Isam Al-Sager also said that the NBK has achieved excellent returns from its investment in IBQ; not only from the gain generated from the sale but also from a decade of profit contribution from IBQ as an associate of the Group.
"We view this transaction as a fruitful exit from a long term investment," he added.
Al-Sager also stressed that this transaction will allow NBK to be more opportunistic in reallocating its freed capital resources into controlling stakes in order to achieve further integration and synergies on the Group level creating shareholders' value.
Al-Sager also added "we are very satisfied with IBQ's accomplishments over the years".
National Bank of Kuwait acquired a 20 percent stake in IBQ in 2004 and increased its stake to 30 percent in 2007 and had been managing the bank.
NBK was founded in 1952 as the first indigenous bank and the first joint stock company in Kuwait and the Gulf Region. NBK reported profits of USD 844 million (KD 238.1 million) for 2013.
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