KARACHI: Summit Bank has received approval from the State Bank of Pakistan (SBP) to conduct due diligence on Burj Bank, it said in a stock exchange filing, in the latest bid for the unlisted lender, which is seeking to boost capital through a stake sale.

The acquisition of a majority shareholding in Burj Bank would fit the long term strategy of Summit Bank, which is planning to convert its operations to conform to Islamic principles that include bans on interest and gambling.

Burj Bank, one of the country’s five full-fledged Islamic banks, held Rs4.4 billion ($42 million) in paid up capital as of December, compared with the regulatory minimum of Rs10bn.

Last month, Burj Bank said it had shortlisted three financial institutions to conduct due diligence on a non-exclusive basis. It also received an extension from the central bank to meet the mimimum capital requirement until June 30.

The Islamic lender has previously attracted interest from state-owned National Bank of Pakistan and MCB Bank Ltd, both conducting their own due diligence in 2014, but a sale has not materialised.

The largest shareholders of Burj Bank are Bahrain’s Bank Alkhair with a 37.9 per cent stake and the Jeddah-based Islamic Corporation for the Development of the Private Sector, which holds a 33.9pc stake.

Published in Dawn, May 4th, 2016