PAKISTAN: Pakistan’s
largest Islamic bank is set to gain an even larger market share as the bank
continues its inorganic expansion strategy with the latest acquisition
expected to be completed in the next few months. Meezan Bank has confirmed
that it is expecting to merge with HSBC Bank Oman in the second half of
2015, following an earlier acquisition of the British bank’s Middle East
operations in Pakistan late last year.
The bank is no stranger to subsuming conventional businesses to its own,
beginning with absorbing French lender Societe Generale’s operations in
2002 and successfully converting them to comply with Shariah law. The
impending purchase would see the Pakistani financier grow its asset base by
about 1% – PKR4.1 billion (US$40.2 million) in gross assets from one
branch. While the number may seem dismal, however, acquiring HSBC’s
portfolio may prove strategic to Meezan’s ambition of building its capacity
in the priority banking segment as did the procurement of HSBC’s Middle
East business.
While HSBC has taken the path of shuttering its business and scaling back
its operations, Meezan Bank on the other hand is capitalizing on the
situation to fuel its rapid expansion. In the last six months, the bank
grew its branch network by 16, bringing the number of branches nationwide
to 444 as the bank undertakes its most aggressive expansion plan ever – to
roll out 122 new units this year, more than twice what was achieved in
2014.
As at the 31st December 2014, Meezan commanded the majority
(over 50%) of total Islamic banking deposits in the republic with total
deposits of PKR380 billion (US$3.73 billion) and with assets amounting to
PKR437.41 billion (US$4.29 billion), the bank was the country’s
eighth-largest bank.
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