The Gulf Bank, Kuwait's second biggest bank, has increased its stake in the London-based United Bank of Kuwait (UBK) to 17.8 per cent from 7.06 per cent by buying out another Kuwaiti bank. The Gulf Bank says it wants, over time, to build up a controlling interest in UBK.

'The Gulf Bank's decision to purchase this additional share is in line with its strategy of gradually increasing its UBK share of 10.7 per cent [before the purchase] to ultimately reach a controlling share, which would reinforce The Gulf Bank's presence in international markets,' the Kuwaiti bank says in a statement, adding that control of UBK would give it a presence inside the EU. One other Kuwaiti bank, National Bank of Kuwait, has a wholly owned subsidiary in London. The Gulf Bank says it bought the extra shares from Bank of Kuwait & the Middle East, but did not disclose the price.

UBK is a consortium bank owned by Kuwaiti banks, which made net profits of £11.1 million (then $17.8 million) in 1996 on assets of £1,754 million ($2,806 million). It operates mainly in the UK and the US, specialising in asset management, real estate investment and corporate lending. It has an Islamic banking unit which recently launched a mortgage product for Muslim borrowers, and is about to open a representative office in Dubai.