KARACHI, Feb 13: French bank Societe Generale (SG) is negotiating to acquire a 10-per cent stake in Pakistan’s first Islamic commercial bank, which is due to begin operating next month, an official said on Wednesday.

The French conglomerate is also discussing the sale of its Pakistani business to Al-Meezan Commercial Bank Ltd., which will be the first commercial bank in Pakistan to start Islamic banking, the chief executive of the Pakistani bank, Irfan Siddiqui, told AFP.

“We are in (an) advanced stage of negotiations with SG and by end March all the four Pakistani branches would be amalgamated in our banking company,” Siddiqui said.

The assets of these branches value about Rs3 billion ($50 million).

Al-Meezan, which already runs an investment bank based on Islam’s prohibition of interest, last month won a licence for Islamic commercial banking from the State Bank.

“We could capitalize the SG’s entire network including its credit resource,” Siddiqui said, adding: “On the other side SG would continue its presence in the Pakistani banking sector even after winding up its direct business from Pakistan.”

Financial and banking institutions from the Middle East, including Shamil Bank of Bahrain and Islamic Development Jeddah among others, already hold shares in the bank.

SG’s four branches in Pakistan — two in Karachi and one each in Lahore and Islamabad — would be amalgamated in the Al-Meezan Bank, Siddiqui said.

An SG official confirmed negotiations were going on between Al-Meezan and the French bank’s Hong Kong regional headquarters and said a deal might be struck in March.—AFP