PAKISTAN:
The largest Islamic bank in the country, Meezan Bank, has contracted an
agreement with HSBC Bank Middle East (HBME), an indirect wholly-owned
subsidiary of HSBC Holdings, to acquire HSBC Pakistan. This follows a due
diligence exercise carried out earlier this month. The acquisition will
take place through a process of amalgamation, according to a bourse
filing on the Karachi Stock Exchange.
The amalgamation is subject to regulatory and other relevant approvals
including the approval of direct shareholders of Meezan Bank and HBME.
Expected to materialize during the second half of 2014, Meezan Bank will
subsequently convert the operations of HSBC Pakistan into Shariah
compliant banking and ensure that customers continue to enjoy
uninterrupted banking services.
HSBC Pakistan’s business currently comprises of 10 branches, with total
assets accounted at PKR48 billion (US$486.57 million), as of the 31st
December 2013.
Meezan Bank’s last acquisition of a foreign bank was made in 2002, when
it acquired the banking operations of Societe Generale in Pakistan (SG
Pakistan) and converted it into Islamic banking. Given such a similar
precedent, the bank is likely to be able to carry out the upcoming
acquisition in a professional and seamless manner.
HSBC Pakistan has been trying to offload its Pakistani operations for the
past two years. It reportedly received bids from major banks in the
country including MCB Bank, United Bank, KASB Finance, Silkbank, Habib
Bank and Allied Bank. The acquisition will increase Meezan Bank’s network
to 361 branches and enhance the bank’s outreach to a larger customer
base.
The Islamic banking industry in Pakistan has shown significant growth,
exceeding 30% annually: with 8.6% in terms of assets and 10% in terms of
deposits, bearing testament to the mounting acceptability and recognition
of Islamic finance across the country.
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