Kuwaiti Islamic bank plans major rights issue

Kuwaiti Islamic lender International Bank said on Wednesday it plans to raise its capital by 45 percent.

In a statement on the Kuwait Stock Exchange website, the bank said the share price in the rights issue will be at a nominal value of 100 fils (0.35 dollars) in addition to a premium of 70 fils (0.24 dollars).

The bank has capital of 103.7 million dinars (363 million dollars), which will rise to 150 million dinars (525 million dollars).

No date has yet been set for the rights issue of 466.6 million new shares to raise 79.3 million dinars (277 million dollars).

The bank posted a loss of 4.65 million dinars (16.3 million dollars) in the nine months to September 30. On Wednesday, the bank's share was trading at 216 fils (0.75 dollars).

The oil-rich Gulf state of Kuwait has six conventional and three Islamic banks.

Unlike conventional banking, Islamic finance is based on the principles of sharia or Islamic law, and charging interest on loans is regarded as usury. The system also bans dealings related to alcohol and gambling.