National Bank of Kuwait (NBK) has bought 13.2 percent of the Kuwait Investment Authority’s (KIA) stake in Islamic lender Boubyan Bank for $295m at a public auction.

NBK bought 154 million shares in the bank for KD84.7m ($295m) or 550 fils a share, taking its holding in Boubyan to 321 million shares, or 27.5 percent.

KIA had set a minimum price of 550 fils ($1.91) per share for the auction, it was reported last month.

NBK, the country's biggest bank by assets, previously agreed to buy a 19.2 percent stake in Boubyan from Commercial Bank of Kuwait (CBK) but Investment Dar, the investment firm that has defaulted on a $100m sukuk, is disputing CBK’s right to sell the stake.

Dar, which owns half of luxury British car maker Aston Martin, has won a court ruling to have the sale suspended.

NBK vice chairman Nasser Al Sayer said Wednesday’s acquisition was an important strategic move for the bank, providing it with a gateway into the Islamic banking market.

“Our main goal is to stabilise Boubyan Bank, enhance its position in the local market and develop its various Islamic banking services,” he said.

The management and operations of NBK and Boubyan would be kept separate and fully independent of each other in accordance with Islamic Banking law and regulation, he added.