HSBC, Credit Suisse to advise on Kuwait’s KFH, Bahrain’s AUB merger talks

The deal provides a non-binding framework to explore the creation of “a major regional banking institution. (REUTERS)
Updated 23 July 2018
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HSBC, Credit Suisse to advise on Kuwait’s KFH, Bahrain’s AUB merger talks

  • KFH declined as much as 1.3 percent for a market value of about $12.8 billion

LONDON: HSBC and Credit Suisse have been selected to advise on a possible merger between Ahli United Bank (AUB) and Kuwait Finance House (KFH), AUB said on Sunday.
A merger between Bahrain’s largest bank and Kuwait’s biggest Islamic lender would be the first cross-border tie-up between Gulf banks in recent years at a time when several other banks are consolidating.
HSBC and Credit Suisse were selected to complete studies to assist AUB and KFH in arriving at a fair share exchange ratio, the statement said, without specifying which investment bank was advising which lender.
If agreement on the share exchange ratio is reached, the next step would be the initiation of due diligence and other steps.
KFH said last week it had invited AUB to begin a due diligence process for a potential merger.
The deal provides a non-binding framework to explore the creation of “a major regional banking institution capable of competing more effectively in its existing and new potential markets,” AUB Chairman Hamad Al-Humaidhi said.
Separately, AUB also said its net profit for the second-quarter was $182.7 million, up 20.3 percent from a year earlier.
Shares in AUB rose 6.8 percent earlier this month to the highest levels since April 2017, and led to the Manama, Bahrain-based lender being valued at $5.66 billion.
KFH declined as much as 1.3 percent for a market value of about $12.8 billion.
Bahrain, which is a key Saudi Arabian ally and home to the US’ Fifth Fleet, hired investment bank Lazard to advise on how to boost its public finances, according to sources with knowledge of the matter.


Malaysian court delays Goldman case on 1MDB fund theft

Updated 24 June 2019
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Malaysian court delays Goldman case on 1MDB fund theft

  • Malaysia filed criminal charges against three units and two ex-employees of the Wall Street titan in December
  • They are accused of misappropriating $2.7 billion and other crimes in relation to bond issues they arranged for 1MDB
KUALA LUMPUR: The Malaysian case against Goldman Sachs on charges the US investment bank stole huge sums from the country’s 1MDB state fund was postponed Monday until September after defense lawyers argued there was a problem with paperwork.
Malaysia filed criminal charges against three units and two ex-employees of the Wall Street titan in December, accusing them of misappropriating $2.7 billion and other crimes in relation to bond issues they arranged for 1MDB.
Allegations that huge sums were looted from the investment vehicle — in a fraud that allegedly involved former Malaysian leader Najib Razak — contributed to the last government’s election defeat last year.
At a procedural hearing in Kuala Lumpur Monday, Goldman lawyer Hisyam Teh Poh Teik said the Hong Kong unit of the bank received its summons just last week, while the summons sent to the Singapore unit only included three out of four charges.
The third Goldman unit in the case is based in London.
He asked for three months to get further instructions from his clients, and the judge set September 30 for another procedural hearing.
Prosecutor Aaron Paul Chelliah told reporters that the prosecution believed all documents had been properly served.
“Their clients have some reservations on whether they were properly served,” he said. “Our position is they have been served.”
Goldman helped arranged bonds totaling $6.5 billion on three occasions for 1MDB, for which they earned fees said to be well above typical rates.
The bank and its former employees are accused of making false and misleading statements to misappropriate huge sums from the 2012 and 2013 bond issuances.
Goldman has vowed to fight the charges, saying the former Malaysian government and 1MDB lied to the bank.
The former bankers accused in the case are Tim Leissner and Ng Chong Hwa, and both have also been charged in the US over the scandal.
Leissner pleaded guilty in America, while Ng was extradited to the US from Malaysia in May and pleaded not guilty.