The Central Bank of Kuwait (CBK) issued a press release Wednesday, approving the KFH-AUB merger but setting some conditions for the deal. These include that AUB-Kuwait should be kept as a separate entity, and that no Kuwait national should be let go in case of downsizing and that KFH should submit a plan and a timeline for converting the involved conventional assets into Islamic. The CBK stated in the press release that the new entity will have a market share of 31% (vs. KFH’s current 26%), which is acceptable and should not affect the sector’s competitiveness, and a market share of 66% in the Islamic space (vs. KFH’s 51% currently), which might negatively affect the segment’s competitiveness, and this is why the CBK decided to keep AUB-Kuwait as a separate entity, to prevent monopoly. The CBK adds that both banks have strong asset quality, that the new entity’s CAR will remain higher than the minimum requirement of 15% (including D-SIB) and that post-merger’s profitability ratios (ROA and ROE) should improve.