Bahrain Kuwait Insurance Company (BKIC) has signed a Memorandum of Understanding (MoU) with Bahrain Islamic Bank to purchase the latter’s entire stake in Takaful International.
The deal will make BKIC the majority shareholder of Takaful International with a stake of 63.68%.
At present, Bahrain Islamic Bank, the second-largest shareholder in the takaful operator, has a stake of 22.75%, while BKIC holds 40.93%. The remaining shareholdings are fragmented, held by several other shareholders among whom the highest stake held is 8.4%.
Meanwhile, Takaful International announced that its financial results have turned around and swung to the black for the year 2016, after two years of losses.
Its general takaful and family takaful businesses achieved a surplus of around BHD79,000 (US$210,000) and BHD149,000, respectively, for 2016, compared to a loss of BHD1.1 million and a surplus of BHD 142,000 in 2015, according to financial statements lodged with Bahrain Bourse.
Gross takaful contributions increased by 6.5% to BHD20.9 million in 2016, while net earned contributions rose by 13% to BHD14.2 million. Underwriting profits grew by 78% to BHD5.3 million.
Mr Younis Jamal Al Sayed, CEO of Takaful International, said that the policies pursued by the company since the beginning of 2015 have had an impact on improving financial results and that restructuring conducted by the company’s various departments contributed to enhancing the quality of services provided to customers and was also reflected in the results.
The financial statements also show that the company made significantly lower impairment losses on available-for-sale investments in 2016.
Takaful International was in the red with a loss of BHD1.7 million in 2014 from a profit of BHD300,000 in 2013.
In April 2015, BKIC said it was raising its stake in the company by 10.8% to 40.9%.
Takaful International, established in 1989, is the first Islamic insurance company in Bahrain.
BHD1 = US$2.65