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Pakistan: The Banking Sector

* * * - - 1 votes The Banking Sector Progress News & Updates

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#1
Jilawatan

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"All News articles posted in this thread are copied from various news and print media websites. We have tried our level best to give reference to each and every article copied. The intention are only to promote the ongoing developments in Pakistan.
 
Regards
UrbanPK.com Team"
 
HSBC plans to expand operations in Pakistan
Raza Mumtaz 'Pakistan Times' UK Bureau Chief

LONDON (UK): The HSBC, one of the world's largest banking and finance services organizations, is planning to expand its operations in Pakistan owing to the positive economic policies and reforms undertaken in the financial sector in the country.

The Group's Chief Executive Stephen K Green, who called on Prime Minister Shaukat Aziz here, appreciated Pakistan's economic reforms. He praised Pakistan's growing economy and said far reaching reforms had made a positive impact, particularly in the financial sector.

He said the reforms could lead to more investment and improvement in the financial services being provided in the country. The reforms have created a very good
environment and more attraction for foreign investment, he added.

The Prime Minister informed him of the opportunities available in
Pakistan for foreign investors and said the companies operating in the country were making good profits owing to the growing middle class.

Headquartered in London, HSBC's international network comprises over 9,500 offices in 76 countries in Europe, the Asia-Pacific region, the Americas, the Middle East and Africa.

HSBC Holdings reported record pre-tax profits for a British bank of $21 billion in 2005, up from $18.94 billion in 2004.

Products of Pakistan

At the same time, 'Pakistan Times' understands that five major British chain stores, having a turnover of over 20 billion Pound Sterling annually, are eyeing Pakistan for seeking enhanced exports of textiles, furniture, leather and garments.

Chairman Export Promotion Bureau (EPB), Tariq Ikram who is part of Prime Minister's delegation visiting the United Kingdom said on Wednesday that it was evident after talks with Chief Executive Officers and Procurement Directors of Debenhams, River Island, British Home Store, Laura Ashley and Dennys. He said, the delegation will visit Pakistan within next three months.

The delegation will guide and advise the Pakistani experts of their
requirements and demands of these stores. He said these were seeking to export different items, including jewellery, sports goods, carperts, furniture, carpets, textiles and garments from Pakistan.

Almost 73 companies from UK, double the number from the previous year, have also evinced keen interest in attending the Expo 2006 in Karachi.

This will be Pakistan's second such event with over 500 exhibitors that will attracts hundreds of leading buyers from all over the world.


Edited by Tekno Arkitect, 14 February 2014 - 07:01 AM.
Info Updated!


#2
Jilawatan

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Abraaj Capital and BMA Capital launch the first and largest Pakistan focused Private Equity Fund of US$300 million

• Fund looks to fully close by September 2006
• Targeted internal rate of return of 30%
• Fund to pursue broad-based & opportunistic strategy and not sector-focused

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Abraaj Capital, one of the leading private equity firms in the Middle East, North Africa and South Asian region and BMA Capital, one of the most prominent investment firms in Pakistan’s financial markets launched a US$ 300 million Abraaj BMA Pakistan Buyout Fund L.P. It is the largest Private Equity fund targeted to investments in Pakistan.

The announcement was made by His Excellency the Prime Minister of Pakistan Shaukat Aziz in a ceremony held at the Prime Minister’s Secretariat in Islamabad. While commenting on the announcement the Prime Minister congratulated Abraaj Capital and BMA Capital on their pioneering effort, and added, "This fund is a testimony to the economic progress of Pakistan and the favorable conditions that are available for investment." He also re-emphasized the role of FDI and Private Equity in Economic development of Pakistan and commended Abraaj and BMA for taking the lead role.

The Abraaj BMA Pakistan Buyout Fund will target an internal rate of return of 30% and will pursue a broad-based and opportunistic strategy, rather than a sector focused strategy. The fund will concentrate on sectors with high growth rates and proven business models. It will also look into fragmented sectors with room for consolidation, with significant barrier to entry and with stability of business cycle and resistance to recession.

Commenting on the announcement, Arif Naqvi, CEO & Vice Chairman, Abraaj Capital said: “We are delighted to announce our latest buyout fund dedicated to Pakistan. Pakistan’s economy is the second fastest growing economy in Asia; the country has achieved an impressive 8.4% growth in GDP in 2005 with relatively low but rapidly increasing levels of debt financing, exports, and FDI creating significant economic upside. The Government’s increasing focus on privatization and the extremely conducive regulatory environment for foreign investment present great opportunities for business and we are proud to be part of it.”

He added: “Private Equity as an asset class (conspicuous by its absence until now in Pakistan) in conjunction with government’s ongoing initiatives can be a major facilitator of wealth creation for all the social and economic classes, thus helping to bring about a balanced and broad-based growth across the populace. It is against this backdrop that Abraaj Capital and BMA Capital have launched the Abraaj BMA Pakistan Buyout Fund. The proposed fund will provide its global investors with an opportunity to participate in Pakistan’s success story through a unique and novel asset-class, and through the use of co-investments and leverage, it will facilitate investments of up to US$ 1 billion into Pakistan, across a range of industries over the next four years. We believe that the partnership between Abraaj Capital and BMA Capital is perfectly positioned to leverage the present opportunity.”

Farrukh Khan, CEO, BMA Capital, said: “Abraaj and BMA together aim to be a formidable force in channelling global private equity capital to high growth Pakistan based opportunities. In short, our mission is to further transform the investment image of Pakistan Inc. by making it one of the emerging investment destinations of choice. Moreover, being committed to growth and innovation in Pakistan's Capital Markets; we are particularly happy to be involved in the first large scale private equity fund. I am confident this will act as an important catalyst for further FDI. The timing is perfect, as Pakistan has increased its rate of privatization completing US$ 4.7 billion of privatizations in the last three years with the current pipeline estimated at over US$ 10 billion. Pakistan has also received record FDI of approximately US$ 3 billion this year. The mandate of the fund is influenced and shaped by the important structural changes undertaken by the present government, current and anticipated macro-economic factors and favorable demographic changes in the medium- to long-term, resulting in outstanding investment opportunities in Pakistan.”

“We see a number of consolidation opportunities in many fragmented industries such as insurance, banking, basic materials, power, automotive parts, telecom, textiles, etc. With BMA’s deep knowledge and understanding of Pakistan and involvement in landmark transactions in Pakistan and Abraaj Capital’s regional expertise in private equity, we intend to focus on ‘buy & build’ initiatives, under-leveraged companies with quality assets or stable cash flows and under-managed or under-capitalized assets, adding significant value for both our partner companies and shareholders in the process ” he added.

Moazzam Malik, Managing Director and Head of Private Equity at BMA Capital said, "BMA Capital has already commenced on the ground due diligence with Abraaj teams on transactions in Pakistan and we have an extensive deal pipeline in key growth sectors. Abraaj and BMA provide a winning combination for target companies and the fund's investors. We are keen to attract the best talent to this opportunity as we expand."

About Abraaj Capital: A member of the Dubai International Financial Centre, Abraaj Capital is one of the leading asset management firms in the Middle East, North Africa and South Asian region. It has US$ 1.5 billion of assets under management. The firm’s primary expertise is in private equity buyouts, strategic minority block positions in public enterprises and real estate investments within the region. As recognition of its operating excellence and regional expertise, Abraaj received the ‘Middle Eastern Private Equity Firm of the Year’ award from Private Equity International in March 2006. In addition, it has received the ‘Best Private Equity House’ award from the Banker Middle East in May 2006. Recently, Abraaj Capital has entered into a joint venture with Deutsche Bank and Ithmaar Bank to raise a US $ 2 billion Shari’a compliant ‘Infrastructure and Growth Capital Fund’ in the region. The team of professionals at Abraaj (representing over 20 nationalities) has a long history of working together and has been associated with some of the landmark private equity transactions in the Middle East, including Aramex (the first ever tender/buyout of an Arab company listed on the NASDAQ), Inchcape Middle East, Spinneys, Joramco and 25 other companies across the region.

About BMA Capital:
BMA Capital is one of the leading investment firms in Pakistan’s financial markets. The firm and its group companies provides a wide range of services with a particular focus on capital markets, corporate finance, asset management and retail brokerage, and has been a corporate member of the Karachi Stock Exchange (KSE) since 1992. BMA is one of the leading brokers in the equity, fixed income and inter-bank foreign exchange markets.

In June 2005, BMA Asset Management was licensed to provide Investment Advisory and Asset Management services to launch both open-ended and closed-end mutual funds. The BMA Group has been instrumental in the launch of the BMA Pakistan Opportunities Fund (POF), which is Pakistan’s first open end offshore fund, focusing on investment opportunities in listed securities in Pakistan and has rapidly established a strong presence with Assets under Management crossing the Rs.4 billion mark in record time. In April 2006, BMA Capital’s Corporate Finance & Advisory successfully completed the largest privatization transaction in the history of Pakistan, advising Etisalat on the acquisition of PTCL; the firm has the distinction of successfully advising on over 50% of all privatizations in Pakistan, amounting to nearly US$4 billion. BMA has also won the mandate to lead manage an international GDR offering for OGDC, Pakistan’s largest oil and gas exploration and production company, in a consortium consisting of BMA, Goldman Sachs and Citigroup. BMA Trade, the firm’s retail brokerage brand, is currently in soft launch and will be opening its first flagship outlets in Karachi and Islamabad in June 2006.


Abraaj Capital

#3
Suhaib

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HSBC plans to acquire Prime Bank



By Shahid Iqbal


KARACHI, June 29: Another international bank, Hong Kong Shanghai Bank (HSBC), has decided to expand its operation in Pakistan and started negotiations to acquire the whole operations of Prime Commercial Bank, well-placed banking sources said on Thursday.

A team of experts of HSBC had been holding meetings with the high-ups of Prime Bank, said the sources. “Prime Bank has also shown its willingness to sell out its whole operations.”

This will be the second acquisition of the local bank by a foreign financial institution. Earlier, Standard Chartered Bank negotiated the deal to buy Union Bank and completed due diligence last week. The agreement is expected to be completed next month.

HSBC is one of the leading financial institutions in the global banking industry and its sudden interests in Pakistan have surprised financial analysts. HSBC has only four branches -– two in Karachi, one each in Islamabad and Lahore. Some bankers said HSBC was planning to wrap up its operations in Pakistan a few years ago and was operating on low key level.

Standard Chartered Bank, after the acquisition of Union Bank, would be the biggest bank with the largest branch network in the country.

The acquisition of Prime Bank would make HSBC second biggest foreign bank in Pakistan. Prime Bank has 62 branches across the country. If the deal is struck, HSBC will be able to reach all corners of the country.

Analysts said the banking industry in Pakistan exhibited tremendous potential of growth in the last couple of years. The profitability reached 99 per cent and the sector stood number one in terms of growth during the financial year 2005-06.

They said the average economic growth of seven per cent for the last three years was another reason that attracted foreign banks like HSBC and Standard Chartered Bank.

“HSBC has shown keen interest in Prime Bank which has the potential to grow fast, while the cost will be much less than Union Bank,” said a senior banker.

When Standard Chartered Bank had initiated to buy Union Bank, a number of bankers predicted this initiation would create a great interest in the international market and more foreign banks might come to buy local banks. It proved correct with latest development in the banking industry.

“The presence of international banks like Standard Chartered and HSBC in Pakistan will improve country’s image abroad and send a very positive signal to the global markets,” said a senior banker, adding that banks had provided record credit to the private sector in the last three years.

As per March 31, 2006 quarterly report, Prime Commercial Bank is operating with 62 branches, having deposits of Rs40.6 billion. In 2005, it posted a profit after tax of Rs495m as compared to Rs345m last year, indicating a growth of 43 per cent.

Prime Commercial Bank came into existence on September 30, 1991, with presence in all the stock exchanges. Some of the foreign investors belong to a well-diversified business group, Bin Mahfooz group of Saudi Arabia.

In case of Union Bank, the Saudi investor was the majority shareholder who initiated the dialogue to sell the bank. The Saudi group would earn at least eight times more than what they invested in Union Bank. Analysts said the Saudi group would also earn much more than what they invested in Prime Bank.

The bank focuses primarily on the middle market commercial banking segment, consumer banking initiatives as well as agricultural, housing, financing of small and medium sized enterprises and Islamic banking.

Total asset of Prime Bank during the period from December 1992 to December 2005 has grown at an annual compound rate of about 23 per cent to Rs53.8 billion. Within this period, shareholders’ equity grew from Rs371 million to Rs3.4 billion, deposits to Rs38.9 billion and advances (net) to Rs25.5 billion.


http://www.dawn.com/.../06/30/ebr1.htm

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State Bank of Pakistan

PUBLIC SECTOR COMMERCIAL BANKS
The Bank of Punjab
The Bank of Khyber
National Bank of Pakistan
First Women Bank Limited

PRIVATE SECTOR COMMERCIAL BANKS
Mybank Limited
NIB Bank Limited
Atlas Bank Limited
Habib Bank Limited
Union Bank Limited
Allied Bank Limited
United Bank Limited
Soneri Bank Limited
Bank Alfalah Limited
Faysal Bank Limited
Bank Al-Habib Limited
Metropolitan Bank Limited
Askari Commercial Bank Limited
Crescent Commercial Bank Limited
Saudi Pak Commercial Bank Limited

SPECIALIZED BANKS
SME Bank Limited
Zarai Taraqiati Bank Limited
Industrial Development Bank of Pakistan

MICRO FINANCE INSTITUTIONS
Khushhali Bank
Pak Oman Micro Finance Bank

ISLAMIC BANKS
Meezan Bank Limited
Bank Islami Pakistan Limited

FOREIGN BANKS
Citibank N.A.
Deutsche Bank AG
Rupali Bank Limited
ABN AMRO Bank N.V
Habib Bank AG Zurich
Standard Chartered Bank
American Express Bank Limited
Oman International Bank S.A.O.G.
Albaraka Islamic Bank B.S.C. (E.C.)
The Bank of Tokyo-Mitsubishi-UFJ, Limited
The Hong Kong and Shanghai Banking Corp. Ltd.



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HSBC plans to acquire Prime Bank
By Shahid Iqbal

KARACHI, June 29: Another international bank, Hong Kong Shanghai Bank (HSBC), has decided to expand its operation in Pakistan and started negotiations to acquire the whole operations of Prime Commercial Bank, well-placed banking sources said on Thursday.

A team of experts of HSBC had been holding meetings with the high-ups of Prime Bank, said the sources. “Prime Bank has also shown its willingness to sell out its whole operations.”

This will be the second acquisition of the local bank by a foreign financial institution. Earlier, Standard Chartered Bank negotiated the deal to buy Union Bank and completed due diligence last week. The agreement is expected to be completed next month.

HSBC is one of the leading financial institutions in the global banking industry and its sudden interests in Pakistan have surprised financial analysts. HSBC has only four branches -– two in Karachi, one each in Islamabad and Lahore. Some bankers said HSBC was planning to wrap up its operations in Pakistan a few years ago and was operating on low key level.

Standard Chartered Bank, after the acquisition of Union Bank, would be the biggest bank with the largest branch network in the country.

The acquisition of Prime Bank would make HSBC second biggest foreign bank in Pakistan. Prime Bank has 62 branches across the country. If the deal is struck, HSBC will be able to reach all corners of the country.

Analysts said the banking industry in Pakistan exhibited tremendous potential of growth in the last couple of years. The profitability reached 99 per cent and the sector stood number one in terms of growth during the financial year 2005-06.

They said the average economic growth of seven per cent for the last three years was another reason that attracted foreign banks like HSBC and Standard Chartered Bank.

“HSBC has shown keen interest in Prime Bank which has the potential to grow fast, while the cost will be much less than Union Bank,” said a senior banker.

When Standard Chartered Bank had initiated to buy Union Bank, a number of bankers predicted this initiation would create a great interest in the international market and more foreign banks might come to buy local banks. It proved correct with latest development in the banking industry.

“The presence of international banks like Standard Chartered and HSBC in Pakistan will improve country’s image abroad and send a very positive signal to the global markets,” said a senior banker, adding that banks had provided record credit to the private sector in the last three years.

As per March 31, 2006 quarterly report, Prime Commercial Bank is operating with 62 branches, having deposits of Rs40.6 billion. In 2005, it posted a profit after tax of Rs495m as compared to Rs345m last year, indicating a growth of 43 per cent.

Prime Commercial Bank came into existence on September 30, 1991, with presence in all the stock exchanges. Some of the foreign investors belong to a well-diversified business group, Bin Mahfooz group of Saudi Arabia.

In case of Union Bank, the Saudi investor was the majority shareholder who initiated the dialogue to sell the bank. The Saudi group would earn at least eight times more than what they invested in Union Bank. Analysts said the Saudi group would also earn much more than what they invested in Prime Bank.

The bank focuses primarily on the middle market commercial banking segment, consumer banking initiatives as well as agricultural, housing, financing of small and medium sized enterprises and Islamic banking.

Total asset of Prime Bank during the period from December 1992 to December 2005 has grown at an annual compound rate of about 23 per cent to Rs53.8 billion. Within this period, shareholders’ equity grew from Rs371 million to Rs3.4 billion, deposits to Rs38.9 billion and advances (net) to Rs25.5 billion.

Source: Dawn


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MCB Bank plans London Listing

KARACHI, July 4: MCB Bank Ltd has said it is planning to issue global depository receipts to be listed on the London Stock Exchange. “A consortium of Merrill Lynch and KASB has been mandated to place the issue with institutional and retail investors outside Pakistan, it said in a statement to the Karachi Stock Exchange on Tuesday. It did not give any size or time frame for the planned issue.

MCB Bank has an asset base of around $5 billion and a deposit base of over $3.8 billion, the statement said. The bank has a market capitalisation of over $1.7 billion and is the second largest listed bank on the Karachi Stock Exchange behind National Bank of Pakistan.

This is the second planned GDR issue by a Pakistani entity in recent months.

In May, the government of Pakistan appointed Citigroup, Goldman Sachs and BMA Capital Management to manage a sale of up to 15 per cent of OGDCL through a GDR issue and a domestic offering.

Source: MCB


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45% growth in online banking in Pakistan

KARACHI: The commercial banks have registered a growth of 45 percent in opening new online branches in the second quarter of the current fiscal year, State Bank of Pakistan data said on Monday.

During this quarter retail payment transaction (paper based and electronic) registered a growth of 5.05 percent in numbers, whereas the value of transactions increased by 4.91 percent over the first quarter of 2005-06.

Quarterly growth on the basis of previous quarter showed growth at the rate of 5.45 percent and growth in value of transactions by 2.98 percent, whereas the growth rate was 23.46 percent and 12.20 percent in case of number of transactions and amount, respectively, in the previous quarter.

Electronic banking: The central bank data said electronic transactions have posted a growth of 3.05 percent in the number of transactions and the amount showed a growth of 66.20 percent during the current quarter. The main contributor to growth in the value is real time online funds transfer by online bank branches that posted a 73 percent increase.

During the last six quarters the transactions from paper-based banking to e-banking has increased in terms of number of transactions. However, the value has achieved a remarkable growth, which has been driven by B2B through online branch network.

Online Branch Network and Automated Teller Machines (ATMs): Online branch network is expanding to meet the funds movement needs of customers. This quarter witnessed the addition of 235 new branches in the online network. The coverage of online branches as a percentage of total branches has also increased from 41 percent in

the previous quarter to 45 percent in the current quarter. As such, the total number of online branches reached 3,265 out of total branch network of 7,245 reported by banks.

Similarly, during the second quarter of fiscal year 2005-06 banks have added 75 new ATMs in their network, bringing the total to 1,217, registering a growth of 6.6 percent as compared with 11 percent in the last quarter.

As such, 189 new machines were added in the first half of the current financial year as compared with 110 new machines added during the same period last year.

Number of (credit/ debit/smart)cardholders: At the end of second quarter of the current fiscal the number of credit, debit, smart and ATM cardholders increased from 3.664 million to 4.072 million, showing a growth rate of 11 percent as compared with eight percent during the previous quarter. The total number of credit cards reached to 1.257 million from 1.181 million and registered a growth of six percent as compared with 13 percent in the preceding quarter.

The total number of debit cards increased from the previous quarter figure of 2.197 million to 2.556 million in the current quarter, showing a growth rate of 16 percent as compared with a 14 percent growth rate in the preceding quarter. The total number of ATM cards is 0.137 million in the current quarter as compared with 0.175 million in the previous quarter, showing a decline of 21 percent and it is because of convergence of ATM cards into debit or smart cards. The total number of smart cards, which offer a high level of security, has reached 0.122 million at the end of 2nd quarter as compared with 0.111 million at the end of the last quarter, showing a growth of 10 percent over the last quarter.

Volume on e-banking channels: During the second quarter the number of transactions increased from 2.848 million to 3.475 million, showing growth in transactions of 22 percent and the amount by 73 percent over the last quarter, as against the 1st quarter’s growth of 24 percent and 11 percent, respectively.

Internet Banking: Internet banking is getting momentum and during the second quarter the number of transactions was 0.094 million and the amount involved was Rs 4.321 billion as compared with 0.059 million transactions involving an amount of Rs 3.635 billion in the first quarter of the same fiscal, showing a growth of 59.32 percent in number and 18.87 percent in amount over the last quarter. The transfer pertains to intra- bank account to account transfer only.


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#8
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Abraaj Capital and BMA Capital launch the first and largest Pakistan focused Private Equity Fund of US$300 million
• Fund looks to fully close by September 2006
• Targeted internal rate of return of 30%
• Fund to pursue broad-based & opportunistic strategy and not sector-focused

Posted Image


Abraaj Capital, one of the leading private equity firms in the Middle East, North Africa and South Asian region and BMA Capital, one of the most prominent investment firms in Pakistan’s financial markets launched a US$ 300 million Abraaj BMA Pakistan Buyout Fund L.P. It is the largest Private Equity fund targeted to investments in Pakistan.

The announcement was made by His Excellency the Prime Minister of Pakistan Shaukat Aziz in a ceremony held at the Prime Minister’s Secretariat in Islamabad. While commenting on the announcement the Prime Minister congratulated Abraaj Capital and BMA Capital on their pioneering effort, and added, "This fund is a testimony to the economic progress of Pakistan and the favorable conditions that are available for investment." He also re-emphasized the role of FDI and Private Equity in Economic development of Pakistan and commended Abraaj and BMA for taking the lead role.

The Abraaj BMA Pakistan Buyout Fund will target an internal rate of return of 30% and will pursue a broad-based and opportunistic strategy, rather than a sector focused strategy. The fund will concentrate on sectors with high growth rates and proven business models. It will also look into fragmented sectors with room for consolidation, with significant barrier to entry and with stability of business cycle and resistance to recession.

Commenting on the announcement, Arif Naqvi, CEO & Vice Chairman, Abraaj Capital said: “We are delighted to announce our latest buyout fund dedicated to Pakistan. Pakistan’s economy is the second fastest growing economy in Asia; the country has achieved an impressive 8.4% growth in GDP in 2005 with relatively low but rapidly increasing levels of debt financing, exports, and FDI creating significant economic upside. The Government’s increasing focus on privatization and the extremely conducive regulatory environment for foreign investment present great opportunities for business and we are proud to be part of it.”

He added: “Private Equity as an asset class (conspicuous by its absence until now in Pakistan) in conjunction with government’s ongoing initiatives can be a major facilitator of wealth creation for all the social and economic classes, thus helping to bring about a balanced and broad-based growth across the populace. It is against this backdrop that Abraaj Capital and BMA Capital have launched the Abraaj BMA Pakistan Buyout Fund. The proposed fund will provide its global investors with an opportunity to participate in Pakistan’s success story through a unique and novel asset-class, and through the use of co-investments and leverage, it will facilitate investments of up to US$ 1 billion into Pakistan, across a range of industries over the next four years. We believe that the partnership between Abraaj Capital and BMA Capital is perfectly positioned to leverage the present opportunity.”

Farrukh Khan, CEO, BMA Capital, said: “Abraaj and BMA together aim to be a formidable force in channelling global private equity capital to high growth Pakistan based opportunities. In short, our mission is to further transform the investment image of Pakistan Inc. by making it one of the emerging investment destinations of choice. Moreover, being committed to growth and innovation in Pakistan's Capital Markets; we are particularly happy to be involved in the first large scale private equity fund. I am confident this will act as an important catalyst for further FDI. The timing is perfect, as Pakistan has increased its rate of privatization completing US$ 4.7 billion of privatizations in the last three years with the current pipeline estimated at over US$ 10 billion. Pakistan has also received record FDI of approximately US$ 3 billion this year. The mandate of the fund is influenced and shaped by the important structural changes undertaken by the present government, current and anticipated macro-economic factors and favorable demographic changes in the medium- to long-term, resulting in outstanding investment opportunities in Pakistan.”

“We see a number of consolidation opportunities in many fragmented industries such as insurance, banking, basic materials, power, automotive parts, telecom, textiles, etc. With BMA’s deep knowledge and understanding of Pakistan and involvement in landmark transactions in Pakistan and Abraaj Capital’s regional expertise in private equity, we intend to focus on ‘buy & build’ initiatives, under-leveraged companies with quality assets or stable cash flows and under-managed or under-capitalized assets, adding significant value for both our partner companies and shareholders in the process ” he added.

Moazzam Malik, Managing Director and Head of Private Equity at BMA Capital said, "BMA Capital has already commenced on the ground due diligence with Abraaj teams on transactions in Pakistan and we have an extensive deal pipeline in key growth sectors. Abraaj and BMA provide a winning combination for target companies and the fund's investors. We are keen to attract the best talent to this opportunity as we expand."

About Abraaj Capital: A member of the Dubai International Financial Centre, Abraaj Capital is one of the leading asset management firms in the Middle East, North Africa and South Asian region. It has US$ 1.5 billion of assets under management. The firm’s primary expertise is in private equity buyouts, strategic minority block positions in public enterprises and real estate investments within the region. As recognition of its operating excellence and regional expertise, Abraaj received the ‘Middle Eastern Private Equity Firm of the Year’ award from Private Equity International in March 2006. In addition, it has received the ‘Best Private Equity House’ award from the Banker Middle East in May 2006. Recently, Abraaj Capital has entered into a joint venture with Deutsche Bank and Ithmaar Bank to raise a US $ 2 billion Shari’a compliant ‘Infrastructure and Growth Capital Fund’ in the region. The team of professionals at Abraaj (representing over 20 nationalities) has a long history of working together and has been associated with some of the landmark private equity transactions in the Middle East, including Aramex (the first ever tender/buyout of an Arab company listed on the NASDAQ), Inchcape Middle East, Spinneys, Joramco and 25 other companies across the region.

About BMA Capital:
BMA Capital is one of the leading investment firms in Pakistan’s financial markets. The firm and its group companies provides a wide range of services with a particular focus on capital markets, corporate finance, asset management and retail brokerage, and has been a corporate member of the Karachi Stock Exchange (KSE) since 1992. BMA is one of the leading brokers in the equity, fixed income and inter-bank foreign exchange markets.

In June 2005, BMA Asset Management was licensed to provide Investment Advisory and Asset Management services to launch both open-ended and closed-end mutual funds. The BMA Group has been instrumental in the launch of the BMA Pakistan Opportunities Fund (POF), which is Pakistan’s first open end offshore fund, focusing on investment opportunities in listed securities in Pakistan and has rapidly established a strong presence with Assets under Management crossing the Rs.4 billion mark in record time. In April 2006, BMA Capital’s Corporate Finance & Advisory successfully completed the largest privatization transaction in the history of Pakistan, advising Etisalat on the acquisition of PTCL; the firm has the distinction of successfully advising on over 50% of all privatizations in Pakistan, amounting to nearly US$4 billion. BMA has also won the mandate to lead manage an international GDR offering for OGDC, Pakistan’s largest oil and gas exploration and production company, in a consortium consisting of BMA, Goldman Sachs and Citigroup. BMA Trade, the firm’s retail brokerage brand, is currently in soft launch and will be opening its first flagship outlets in Karachi and Islamabad in June 2006.


Abraaj Capital


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#9
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Pakistan’s MCB plans to raise $100m in overseas share sale, Bloomberg

KARACHI – MCB Bank, Pakistan's No 4 bank by deposits, plans to raise $100 million in the first overseas share sale by a lender from the South Asian nation, President and Chief Executive Officer Mohammad Aftab Manzoor, pictured, said.

The bank, formerly known as Muslim Commercial Bank, will make the offering of global depositary receipts between September and December and use the proceeds to fund expansion, Manzoor said in an interview on June 28.

The sale “will make us the first Pakistani bank to list overseas and will get international investors to look at us,'” Manzoor said. Merrill Lynch and Goldman Sachs Group are among the investment banks being considered for the mandate.

Pakistani banks need funds to meet demand for credit in an economy that Prime Minister Shaukat Aziz says will expand at an annual pace of as much as 8 percent over the next five years. Bank lending from July 1 to May 20 amounted to 358 billion rupees ($5.96 billion), beating the 330 billion rupee target for the full year to June 30, central bank data showed.Karachi-based MCB Bank's profit more than tripled to 8.9 billion rupees in the year ended December 31, from 2.4 billion rupees in 2004.

The lender plans to acquire a small local bank and expand its domestic and overseas branch network to propel growth in deposits and loans, Manzoor said. The bank's deposits rose 3.7 percent to 229 billion rupees last year, making it the nation's fourth-biggest bank after National Bank of Pakistan, Habib Bank and United Bank. Loans rose 31 percent to 180.3 billion rupees.

“MCB's biggest challenge is to attract more deposits so they can lend more,” said Suleman Amir Ali, an analyst at Invest Capital and Securities, who has a “buy” recommendation on the stock. MCB's shares rose 5 percent to 190.80 rupees in Karachi on June 28. The stock has gained 33 percent in the past six months. “Growth is the only way to go,” said Manzoor, 51, a former Citigroup banker who has been at the helm of MCB for the past six years. “In five years we want to be the size of Habib Bank and 10 years from now we want to be the biggest bank in Pakistan.”

MCB's deposits will grow 16 percent in 2006 and 8 percent in 2007, AKD Securities said in a June 23 report. National Bank of Pakistan has 463.4 billion rupees of deposits, more than twice as much as MCB. Habib Bank's deposits total 432.5 billion rupees. “Everyone targets to become the biggest,” said Habib ur Rahman, chief executive at Atlas Asset Management, which oversees 5 billion rupees. “But beating National Bank of Pakistan is not easy. They are huge and that's not a realistic target. Right now, even Habib Bank is way ahead of MCB.”

MCB Bank, which has 10,000 employees, plans to acquire a small local bank within two years to ramp up its deposit base, Manzoor said. “We are looking at one or two cases which make sense,” he said, without naming the banks. He aims to increase the bank's share of total deposits from 8.5 percent to 15 percent in the next three to five years. Pakistan's banking system has 2.7 trillion rupees of deposits, according to the central bank. MCB Bank plans to raise the number of branches to 1,200 within the next three years, from 960 now, Manzoor said. The bank will also open four new overseas offices in Toronto, Kabul, Dubai and Mumbai. It now has three branches in Sri Lanka and one in Bahrain.

“We want to be able to capture trade flows with Afghanistan and India because a lot of our clients export cement to Afghanistan and trade with India is bound to grow,” said Manzoor. The Dubai office will be used to solicit remittances, Manzoor said. The United Arab Emirates is the third-largest source of overseas remittances to Pakistan after the US and Saudi Arabia. Pakistan's overseas remittances rose 8.7 percent to $4.1 billion in the period from July to May.

MCB is also planning an equity fund and a fixed income fund by September, possibly in collaboration with an international bank. Among others, it's in talks with Deutsche Bank, Credit Suisse Group and Royal Bank of Canada, Manzoor said. The bank will introduce a credit card in collaboration with Visa International by September, which Manzoor expects will result in as many as 150,000 card accounts in the first year.
“It makes sense to diversify now,” he said. ”In corporate lending we have reached saturation and the earnings are minimal compared to credit cards, which will make us the most money.”

Business Day


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Saudi Pak to become public company

Saudi Pak Agricultural and Industrial Investment Company is likely to be soon converted into a public limited company with a view to have an access to the capital market.

Informed sources told Dawn on Friday that the Annual General Meeting (AGM) of the Saudi Pak, held recently, has approved its plan to go public which will help it to further strengthen its resource base.

A decision has been taken to get the proposed Saudi Pak public limited company enlisted on the stock exchanges of the country.

The company will make an initial public offering (IPO) after having been formally converted into a public limited company.

Sources also said that both the governments of Saudi Arabia and Pakistan have also approved the setting up of a Saudi Pak Real Estate Development Company. A number of international companies from China, United Arab Emirates (UAE) and Malaysia have expressed their willingness to enter into joint venture with Saudi Pak by substantially investing in the real estate sector of Pakistan.

Pakistan's central bank, sources said, was currently processing the establishing of Saudi Pak Real Estate Company and was expected to shortly accord its approval.

The new company will finance infrastructure projects and housing schemes in the country. It will also provide funding for the development of new tourist spots, shopping malls, hotels and office blocks.

The new company will have a complete corporate and management structure for promoting long-term investment horizon in Pakistan for which necessary regulatory approval of the Securities and Exchange Commission of Pakistan (SECP) was also being sought.

All the necessary spade work relating to the setting up of the real estate development company had been completed, and according to the sources, as soon as the formal approval was granted its activities would start in all the four provinces and in Azad Kashmir.

The board of the directors of the Saudi Pak had approved an initial capital of Rs500m for the real estate development company.

"This will be a first ever organised company to cater to the huge requirements of housing, infrastructure etc., in Pakistan,” a source said, adding that the new company will offer significant loaning to help meet the housing and other related requirements.

Saudi Pak Investment Company has made new approvals worth Rs4.7bn during the first six months of the current calendar year against Rs3.3bn of the same period last year. Likewise its disbursements were to the tune of Rs3.4bn by June 2006 against Rs2.4bn of the corresponding period of 2005. The company made a recovery of Rs2.5bn in first six months of 2006 against Rs2.2bn of the same period last year.

Source: Dawn


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State Bank floats land bank idea, Institutions to acquire land from various agencies, sell to developers
By Azhar Mahmood
9th July, 2006

KARACHI: The idea of establishing at least four land banks at the four provincial capitals of the country has been floated before the policymakers of the central bank.

Sources of the banking industry said these banks would be under private ownership. Central bank is yet to formulate and promulgate the required rules of business.Under the idea the government land will be sold to these banks for construction of housing projects.

Sources said that presently various levels of governments and their respective agencies have large inventory of unused or dormant land in city centers and suburbs that could be made useable through institution of land banks so as to make housing more affordable, especially for working class of urban areas.

The land banks would not only help in increasing the supply of land, but would also act as an effective check on upward pressure on land prices. However institution of land banks requires a suitable structure, along with an effective regulatory framework that may enable transparent utilisation of government land.

Land banks are designed to acquire land from the owning agencies and sell it to third parties for development so as to yield a umber of benefits, that is a clear title to land, transparency in allocation, specific targeting of development objectives, utilisation of strategic land parcels and involvement of communities.

Sources said it has been further proposed that there is no way to increase the supply of land on a regular basis other than creation of land banks. Sources said the commercial bankers of the country have also suggested formation of a new institution similar to NADRA for the start of land registration information system.

Sources said this system is required for increasing origination of housing loans at the primary mortgage market and development of secondary mortgage market. The bankers argued that a properly planned and efficient Land Registration Information System would not only secure the interest of mortgagee financial institutions and investors but would also help in consolidating a decentralised property system that could facilitate general public in numerous ways and would also lead to one window title documentation and increase in property registration thereby enabling provincial governments to realise the revenue generating potential in lieu of property transactions.

Bankers said the establishment of such a new institution would enable uniformity in registration standards among land owning agencies but such an agency could act as universal supervisory and regulatory body of the land owning agencies. The establishment of such system will help in increasing the outreach of housing loans and decreasing the processing time and cost for the mortgagee financial institutions.

Source: The NEWS


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PM inaugurates Islamic bank
11th July, 2006

KARACHI: Prime Minister Shaukat Aziz has formally inaugurated Islamic bank at Governor House here Monday and opened his bank account therein.

Speaking on the occasion, the Prime Minister said Islamic banks will have to compete with traditional banks in the competitive environment in banking sector.

He went on to say that success of Islamic bank will depend on the enforcement of Sharia on one hand and on the other hand the success will too rely on better delivery of service and problems resolution strategy of the account holders. Professional edge plays a key role in this regard, he added.

He underlined investment in the development of human resources will eventually accelerate the pace of business transaction of the Islamic banks and contribute to development of these banks.

Chief Executive officer of Bank Islami Pakistan Limited Hassan Aziz Balgrami said Bank Islami limited is first ever bank of Pakistan, which has obtained license from State Bank of Pakistan under new license guidelines. Bank of Islami emerged as successful IPO. It has remained first primary offering from the banking sector in Karachi stock exchange.

He told Islamic Bank is the first bank of Pakistan and region, which will use bio-metric ATM. It is such a standard, which will ensure security services. Usage of Audio identification technology phone in banking will also define new standard. It is all being done to ensure provision of better banking services to the account holders in line with Shariah. Three major financial institutions of tremendous good will are patronizing this bank. CDC grouping has been contributing to set up institutions, he added.


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Doha Bank launches financial products for Pakistanis

DOHA • Doha Bank yesterday signed an agreement with EFU Life Assurance Company of Pakistan which facilitates the subscription of personal financial products for non resident Pakistanis living in Qatar. EFU Life is the largest private life insurance company in Pakistan. Under the agreement, Doha Bank shall provide necessary information about the various unit linked investment products being offered by EFU Life Assurance to the Pakistanis residing in Qatar and facilitate movement of documents and funds if they wish to purchase such products.

There shall be three products initially on offer, namely Smart Education Plan, Smart Retirement Plan and Smart Savings Plan. Smart Education Plan is a savings product under which parents shall be able to able to invest small sums of money on a monthly or yearly basis for their children's future and get the same back with assured returns after the pre-determined period. Smart Retirement Plan is for the people who wish to plan their own future and retire from active work after certain number of years. Similarly, Smart Savings Plan is for the people who are looking for higher but secured returns on a medium to long term basis.

R Seetharaman, Deputy Chief Executive of Doha bank said that with the prohibitive cost of quality education at higher levels, it is the commitment of Doha Bank to provide financial products and services to our customers which helps them to manage their finances better and to secure the future of themselves and their families. We understand the needs of our customers and accordingly come out with customer centric products and services.

"We partnered with EFU Life Assurance because it is the largest and most reputed private Life Assurance Company in Pakistan. It makes sense for an expatriate to buy a financial product from a company, they already know and trust. This is also in line with Doha Bank's commitment to offer the best financial products and services available in the market to its customers", Seetharaman further said.

Manoj Kumar, Head of Bancassurance said that all the three plans can be tailored to suit the requirements of the individuals. Non Resident Pakistanis can save on yearly or monthly basis or can invest their surplus money on a lump sum basis to take care of their future. "All the schemes have an additional layer of protection as the nominee gets the pre-determined sum of money in addition to the invested amounts in the unfortunate event of the death or disability of the investor", Kumar further said.

Taher Sachek, the Chief Executive Officer of EFU Life Assurance said that Pakistanis can subscribe to any of the three schemes in Qatar through Doha Bank and can still get serviced in Pakistan if they return home before the maturity of the policy. "All our products are capital guaranteed and our funds have performed exceedingly well in the past", he further said.

Manoj Kumar added that a dedicated team of financial advisors have been trained to handle customers who wish to invest in such products. Mohammad Ali, Assistant General Manager and Kashif Naqvi, Senior Manager from EFU Life Assurance were also present on the occasion.

Source ::: The Peninsula


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Standard Chartered set to take over Pakistan bank

KARACHI[18 Jul 2006] - Emerging markets giant Standard Chartered is completing a deal to buy Pakistan's Union Bank in what would be the South Asian country's largest corporate takeover.

The British-based bank plans to acquire a 49 percent stake in the company from a Saudi investor, banking officials said Tuesday.

"Due diligence of the transaction has been completed and regulatory approval may take some time for formal completion of the deal," State Bank of Pakistan spokesman Syed Wasimuddin told AFP.

"(The deal) is good for the country, for the banking sector," Union Bank President Shaukat Tareen said, without giving details of the sale.

Reports said the deal would be worth at least 500 million dollars but the central bank would not confirm it.

Banking sources said the takeover could take place by November, with the sale agreement being signed by September.

Union Bank is Pakistan's eighth largest bank with two billion dollars in assets, 65 branches across Pakistan and two overseas, officials said.

"This is the biggest ever corporate takeover in the country and a good omen for the banking sector which is already performing well," said Syed Sulaiman Akhtar, banking analyst at Foundation Securities.

Source: AFP


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Islamic banking helps financial sector growth

KARACHI: Governor State Bank of Pakistan Dr Shamshad Akhtar on Wednesday expressed optimism that Dubai Islamic Bank will set standards for other Islamic banks to follow.

Inaugurating the bank’s cloth market branch, she said we have observed phenomenal growth in Islamic banking in a short period of time. Islamic banking has evolved as an institution to help achieve financial sector growth in a Muslim country like Pakistan.

According to press release of the bank, CEO, Dubai Islamic Bank, Saad Zaman welcoming the governor central bank said the Pakistani Islamic banking market has a high potential of growth owing to investment friendly policies of the government.

He said the central bank of the country has created a positive economic environment for business.

He said this is the second branch and during next 18 months 70 branches will be opened in Pakistan.

Source: The NEWS


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Abu Dhabi banks to open branches in Pakistan
July 22 2006

ISLAMABAD: First Gulf Bank (FGB) and National Bank of Abu Dhabi (NBAD) from the UAE will enter Pakistan's banking sector as they have approached the State Bank for licence to launch their services in Pakistan.

According to Khaleej Times, the two Abu Dhabi-based banks will begin operations in Pakistan as soon as the State Bank of Pakistan (SBP) completes the licensing procedures." "First Gulf Bank will operate in Pakistan under the name of First Gulf Commercial Bank while National Bank of Abu Dhabi (NBAD) will keep its original identity.

Already two Abu-Dhabi banks - Bank Al Falah and United Bank - which were acquired by the Abu Dhabi Group under Pakistan government's privatisation scheme, are operating here. Moreover, Dubai Islamic Bank was also operating in Pakistan and will increase the number of its branches from two to 72 soon. There are currently around 40 banks operating in Pakistan.


Source: Associated Press of Pakistan


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Karachi to host int’l moot on Islamic Banking, money market

KARACHI:An international conference on Islamic banking and money market will be held here at the end this year.

Ferguson Associate’s chairman, Khalid Rafi told that the second international conference on Islamic banking and money market with the collaboration of Dubai International Financial Centre would be held on November 7 and 8.

The conference would deliberate on issues relating to Islamic banking and money market besides reviewing the possibilities of further development in the Islamic banking sector.

Funds worth over $250 billion were presently under the management of Islamic banks across the world, while the Islamic banks’ growth rate per annum range between 15 to 20 percent.

Dubai Islamic Financial Centre’s Director Islamic Finance, Khalid Yusuf said that Pakistan’s economic conditions have improved during recent years, which has heightened the possibilities of foreign investment inflow in Islamic finance here.

Source: Geo TV


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Pakistan springs shock rate rise

Pakistan has announced a surprise interest rate increase of half a percentage point, as higher oil and commodity prices feed inflation.
The State Bank of Pakistan said that its main borrowing cost will rise to 9.5% from 9% on Monday.

It is the first time interest rates have risen in 15 months.

Pakistan is South Asia's second-largest economy and its rapid rate of growth, coupled with high energy prices, are proving a concern for many observers.

The central bank wants to slow the annual inflation rate to 6.5% in the year running to 30 June, 2007. In the previous 12 months, it was 7.9%.

"I personally am feeling quite confident that we should be able to contain inflationary pressures with this rise," said central bank governor Shamshad Akhtar.

However, the bank said it would remain vigilant, hinting that there could be more rate increases should the inflation rate not slow.

Analysts said that the higher interest rates were unlikely to slow the economy and they remained confident that Pakistan would still hit its growth target of 7% for the current fiscal year.

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‘Balochistan has great potential for banking’
Friday, August 04, 2006

QUETTA: Balochistan Governor Owais Ahmed Ghani said on Thursday that the province had huge potential in the banking sector and he added that the government would encourage the private sector to make partnership with the government to exploit opportunities in the province.

He was speaking during the opening ceremony of the Islamic banking branch of Askari Commercial Bank in the provincial capital. Owais said the introduction of Islamic banking by the Askari Commercial Bank was an achievement. The people of Balochistan, especially farmers, will be the largest beneficiaries of the interest-free banking system.

“The establishment of a bank with Islamic banking system is the harbinger of a new era of stable economic system for the country,” according to the governor.

He said President General Pervez Musharraf had earlier decided to write off loans of Balochistan farmers. The farmers in the province would benefit greatly from interest-free banking facilities offered by the ACB.

Askari Commercial Bank Chief Executive Sheryar Ahmed said the bank would open more branches across Balochistan in order to promote Islamic banking.


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SBP unveils criteria for strategic equity investment

KARACHI: As the banks are required to cap their investment in shares at 20 percent of their equity, the strategic investment is excluded from the subject limit to enable banks to take exposure in these investments within overall permissible limits per company.

In order to give a more objective criteria for marking an investment as strategic, as well as replacing the condition for banks to obtain prior approval from the State Bank of Pakistan (SBP), the strategic investment will continue to be excluded from the 20 percent aggregate exposure limit in stocks. While the investment marked as such at the time of investment, shall be retained by the banks/DFIs for at least five years.

Strategic investment is defined to be as an investment which a bank/DFI makes with the intention to hold it for a longer duration and should be marked as such at the time of investment and can only be disposed-off with the prior approval of SBP.

According to a SBP notification, if there is a series of purchases of any company's stocks, the minimum retention period of five years shall be counted from the date of last purchase while the banks/DFIs' investment in a company can be segregated to be categorised as strategic and non-strategic.

The banks' decision to make strategic investment carries great significance, keeping in view the implications of such investment in terms of liquidity management and long term outlook of the investee companies; thus, such decisions have to be undertaken with proper diligence, taking into account all relevant factors.

Accordingly, it is understood that a committee, clearly designated/empowered by the bank, should take the decision for strategic investment. All Record of transactions/decisions, taken by the committee, regarding strategic investment should be properly maintained and kept in a separate file, for provision of the same to the SBP Inspection Team during their visit to the bank.

The banks/DFIs may review their existing strategic investment portfolio in the light of the above criteria, and investments, not falling in strategic portfolio, may be shifted to the Trading Portfolio. However, if any such shifting results in an excess over the 20 percent limit, prescribed under Regulation R-6, the excess should be regularised and brought back within the 20 percent limit within 3 months.

The position of investment in strategic portfolio will be reported by the banks/DFls to the Banking Policy Department, within the 15 days from the date of issue of this Circular Letter, and within two working days from the date of investment in strategic portfolio.

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