UPDATE 1-Kuwait's CBK says cancels Boubyan bank deal with Dar

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KUWAIT, Dec 23 (Reuters) - Commercial Bank of Kuwait (CBKK.KW), the country's third-largest lender, said on Tuesday it has cancelled a deal to buy a stake in Boubyan Bank (BOUK.KW) from Investment Dar (TIDK.KW).

"The Commercial Bank of Kuwait has agreed with Investment Dar to start procedures to cancel the deal of buying ... Boubyan shares," CBK said in a statement, without elaborating.

Last week, Investment Dar said it had sold a 19 percent stake in Islamic lender Boubyan to CBK but retained the right to buy back the shares as it seeks financing.

The news came after National Bank of Kuwait (NBKK.KW) (NKB), the country's largest bank by assets, said on Tuesday it has secured central bank approval to buy up to 40 percent in Boubyan Bank.

The three-month approval period started on Dec. 22, NBK said in a statement, adding that it was yet to start talks with Boubyan for a stake.

"This is an initial approval, we did not start official talks with Boubyan yet," an NBK spokesman said, declining to comment further. Sovereign wealth fund Kuwait Investment Authority (KIA) is Boubyan's largest shareholder owning a 20 percent stake, bourse data showed.

Boubyan Bank, which complies with Islam's ban on the payment or receipt of interest, is competing with larger rival Kuwait Finance House (KFIN.KW) and Kuwait International Bank (KIBK.KW).