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PAKISTAN: Following
months of discussion and undertaking the necessary procedures, Islamic
financier Meezan Bank has finally successfully acquired HSBC Holdings’
operations in Pakistan. While the purchase price was not revealed in its
merger announcement on the Karachi Stock Exchange yesterday, the
acquisition has gained Meezan Bank 10 additional branches, PKR23 billion
(US$223.3 million) in incremental deposit as well as expanded the bank’s
customer base.
Although these figures are small relative to Meezan Bank’s stature (383
branches and a deposit base of PKR318 billion (US$3.09 billion) as at the
end of June 2014), the acquisition is nonetheless an added advantage in
line with the bank’s strategy to grow its financing book utilizing HSBC
Pakistan’s high quality financing and trade portfolio.
Commenting on the matter, Meezan Bank elaborated: “[The bank] launched
its priority banking segment, ‘Meezan Premium Banking’, two years ago and
this has proven to be a very successful initiative in introducing Islamic
banking to the high net worth customer segment. The HSBC acquisition will
help the bank further strengthen itself in this segment and establish
itself as a leader in the country’s priority banking segment.”
If Meezan Bank’s first acquisition of a conventional foreign bank
(Societe Generale in 2002) were to be used as a benchmark, the conversion
of its latest conventional purchase could also be expected to transition
relatively smoothly. “It was considered a great achievement of the Meezan
Bank team that hardly any [Societe Generale] customers were lost during
this process and the bank managed to continue relationships with almost
all the customers,” said the bank, which is reportedly anticipating a
per-party ceiling of approximately PKR6 billion (US$58.25 million) by the
end of 2014.
Rated ‘AA’ (long-term) and ‘A-1+’ (short-term) by local credit rating
agency JCR-VIS, Meezan Bank has consistently posted profits in its
12-year history amid a demanding financial environment, achieving over
40% in compounded annual growth rates in both deposits and branch
network. The acquisition of HSBC Pakistan is widely viewed to be
positive, further cementing the bank’s leading position in the republic’s
Islamic banking industry.
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