KARACHI: Orascom, a telecommunication company having no experience in banking, has also joined the race to win Royal Bank of Scotland (RBS) operations in Pakistan, while June 5, 2009 has been set as last date for submitting offers for acquiring local assets of the London-based bank.

The State Bank of Pakistan on Friday allowed Orascom to conduct due diligence. Two largest Pakistani banks, MCB Bank and Habit Bank, are in the forefront to acquire the RBS operations.

The RBS had announced in March this year that it was divesting its interest from its operations in the Asian region, which include all assets and the undertaking of the RBS.

The RBS Pakistan is operating with 79 branches across the country. The bank’s advances reached Rs68 billion and deposits stood at Rs79 billion. The bank’s assets valued at Rs108 billion.

The RBS was the worst hit bank in Europe in the recent global financial meltdown. The acquisition of ABN Amro in August 2008 proved an even worse deal for the RBS. JS Bank, a relatively small bank, is also interested in buying RBS operations in Pakistan and is conducting due diligence. If JS acquires the RBS, it will suddenly put the JS Bank among the list of large banks operating in Pakistan.

Banking sources told Dawn that the RBS Pakistan had set June 5 as the last date to receive offers from the interested parties.

The sources said that the banking industry had been in hot water since the start of this year and further delay to sell the RBS operations may curtail the current value of its assets. The banks’ income in the first quarter (January-March) of 2009 recorded a fall of 25 per cent and even the large banks like HBL also earned less profit.

When asked why Pakistani banks were willing to go for expansion by acquiring RBS when the banking environment was not favourable, a senior banker said RBS assets were attractive for all contenders.

Analysts believe that MCB Bank is the strongest candidate for the RBS and HBL despite being a heavy-weight could not go beyond a certain limit. However, JS Bank, which has strong financial backing, could try to get the RBS operations at the highest cost.