Temasek unit buys 56% of Pakistan's PICIC

Karachi: Pakistan's NIB Bank, a subsidiary of Singapore state investor Temasek Holdings, said yesterday it had agreed to buy 56 per cent of Pakistan's PICIC for about $300 million.

NIB Bank agreed in Dec-ember to buy a controlling stake in Pakistan Industrial Credit and Investment Corp, or PICIC, which controls PICIC Commercial Bank, a lender with 129 branches across the country.

NIB Bank said in a statement to the Karachi Stock Exchange it had signed agreements with different shareholders of PICIC to buy 56 per cent of the total outstanding shares at Rs78 a share. That makes the deal worth about $300 million.

Under Pakistani law, any company that buys more than 25 per cent of another company has to issue a tender for remaining shares.

NIB Bank is expected to announce a tender offer in the stock market soon. It can decide how many of the shares it will buy.

The deal is one of several involving foreign banks in Pakistan, where the economy has grown strongly thanks to economic reforms over the past few years.

NIB Bank President Kha-waja Iqbal Hassan said in March that after the merger of NIB Bank, PICIC and PICIC Commercial Bank, the combined entity would have about 200 branches.

The bank would pursue aggressive expansion plans once the acquisition was complete, he said.

Competition in the Pakistani sector is expected to rise as foreign players push to increase their presence to benefit from the financial reforms.

Standard Chartered whose Standard Chartered Bank Pakistan is listed on the stock exchange, became the largest foreign bank in Pakistan after the $487 million purchase of Union Bank last year.