KARACHI: JS Bank Ltd on Tuesday said it will acquire a 7.79 per cent stake in BankIslami Pakistan Ltd from Emirates NBD Bank PJSC for Rs1.14 billion.

A regulatory filing showed the smallest lender in terms of market capitalisation is looking to purchase 86.3 million shares in the Islamic bank at the rate of Rs13.24 apiece.

“BankIslami is selling at a discount, which makes it a viable investment for JS Bank,” said Topline Securi­ties Associate Director for Research Umair Naseer while speaking to Dawn.

The stock price of BankIslami rose more than 5pc after the announcement to close at Rs10.69 per share on Tuesday. In contrast, the stock of JS Bank decreased 2.27pc to Rs4.30 a share.

“There’s a lot of growth potential in Islamic banking, which is currently dominated by one very big player,” said Mr Naseer while referring to Meezan Bank Ltd, which owns more than half of all the branches operated by full-fledged Islamic banks.

BankIslami is already an associated company of JS Bank. Jahangir Siddiqui and Company Ltd, which is the parent entity of JS Bank, already owned a 21.26pc stake in BankIslami at the end of December 2020, the latest point in time for which the bank’s shareholding pattern is available.

Ali Hussain and SAJ Capital Management Ltd currently own the largest shareholding in BankIslami with a cumulative stake of 24.37pc.

In case JS Bank receives the go-ahead from the State Bank of Pakistan and the Competition Commission of Pakistan along with a nod from its own shareholders by way of a special resolution, the JS Group will likely be in control of 29.05pc shareholding in the Shariah-compliant lender.

Published in Dawn, March 9th, 2022