KARACHI, May 25: Singapore-based Temasek Holdings Pte has acquired 56 per cent stakes in Pakistan Industrial Credit and Investment Corporation (PICIC). The NIB Bank, a subsidiary of the Temasek, announced on Friday that it agreed to buy 56 per cent stakes of PICIC for about $300 million.
The PICIC had announced on May 14 through a notification that the NIB Bank would pay Rs78 per share for the stake. The NIB Bank endorsed the share price announcement.
However, the NIB will issue 555 right shares for every 100 shares. This was also announced on Friday.
The announcement said the NIB signed agreements with different shareholders of PICIC to buy 56 per cent stakes for a total amount of $300 million.
The expected announcement was taken as a positive sign for the banking sector and Pakistani bankers expected arrival of more foreign banks in the near future.
The Standard Chartered Bank of Pakistan has already acquired Union Bank at a price of $487 million paving the way for ABN Amro to make the same move.
The ABN Amro is in the process of acquiring Prime Bank. The Standard Chartered Bank became the largest foreign bank in Pakistan.
The acquiring of majority stakes in the PICIC would create more interest for major international banks looking for an opportunity to invest surplus wealth created in Middle East after the Iraq war which flared up oil prices.
Most of the wealth created in the Middle East is being managed by large Western banks and these banks are focusing on developing countries, like Pakistan to earn more with slightly higher inherited risks.
Pakistani bankers believe that attraction in the banking sector was the outcome of prevailing economic growth which on average remained seven per cent for the last three years.
