In its weekly update to investors, London-based asset and fund manager Silk Invest noted that Kuwaiti-based Burgan Bank “had successfully completed its capital increase,” a 272.6 million Euros rights issue that will theoretically help “further strengthen its business locally as well as capitalize on its expansion strategy which has primarily targeted high growth markets in the Middle East and North Africa (MENA) region.”  The bank currently has majority stakes, for instance, in the Bank of Baghdad, Gulf Bank Algeria and Jordan Kuwait Bank.  The capital increase, it should be noted, is wholly separate from this week’s report that the bank has a healthy 15.9% capital adequacy ratio (i.e., tier one plus tier two over risk weighted assets) on a consolidated basis.

Moreover, per a S&P report from this past week, Burgan Bank is one of four domestic-based firms that are considered “highly systemically important” in a sector towards which Kuwaiti authorities tend to be more ‘interventionist’ than not.  Despite its worries about the bank’s deterioarting asset quality, S&P thus affirmed Burgan Bank’s ‘BBB+/A-2’ long- and short-term counterparty credit ratings.  A few days later the bank announced its operating income of KD43.2m had grown by 37% while operating profit surged to KD29.3m with a growth of 39%.

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