Kuwaiti lender Gulf Bank has signed an agreement with Boubyan Bank on the potential merger that will create a single Shariah-compliant entity.

The new memorandum of understanding reflects the basis of the discussions of the two lenders and their intent to study the feasibility of the merger proposal independently.

Gulf Bank also confirmed that it has complied with all the relevant requirements, including obtaining Central Bank of Kuwait’s approval to hire consultants prior to the start of the feasibility study.

The two lenders had announced in July that they are considering a merger to establish a single Islamic bank and that they will sign an agreement to proceed with due diligence.

The proposal has been approved by the boards of Gulf Bank and Boubyan Bank.

(Writing by Cleofe Maceda; editing by Seban Scaria) seban.scaria@lseg.com