Mubasher: The Central Bank of Iraq (CBI) has approved the sale of Burgan Bank’s 51.8% stake in Bank of Baghdad to United Gulf Holding Company (UGH), a sister company of the Kuwait-based bank and another subsidiary of the Kuwait Projects Holding Company (KIPCO).

Although the transaction is forecast to have a one-time negative effect by KWD 9 million on the bank's 2019 net income, part of this effect is likely to be offset by KWD 4 million after the transaction is completed, according to a statement to Boursa Kuwait on Tuesday.

The transaction will improve the Kuwaiti bank’s quality of assets through reducing its bad debts by around KWD 34 million, representing 70 basis points (bps) on the group’s bad debts ratio. 

On 5 January, Burgan Bank highlighted that the deal allows it to focus on its main market in Kuwait while integrating and collaborating with its subsidiaries in Turkey, Algeria, and Tunisia.