KARACHI: MCB Bank Ltd will set up a wholly owned Islamic banking subsidiary while dropping plans to take a stake in Islamic lender Burj Bank, according to a filing with the Karachi stock exchange.
Last month, MCB Bank started due diligence on taking a 55 per cent stake in unlisted Burj, which held assets worth Rs53.3 billion ($547 million) as of December, but it said it would not proceed for commercial reasons.
Those plans would have included an additional investment by the private-sector arm of Jeddah-based Islamic Development Bank, which already holds a 33.9pc stake in Burj.
Bahrain’s Bank Alkhair is its largest shareholder, with a 37.9pc stake in Burj, which it has classified as held-for-sale since June 2012.
The move comes amid increased activity in Pakistan’s Islamic banking sector, with regulators stepping up development efforts and lenders expanding operations in the world’s second-most populous Muslim nation.
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