KARACHI, Feb 1: Rupali Bank is expected to emerge as one of the strongest banks in Pakistan after the merger of Arif Habib Securities and injection of a huge equity into the bank.

The board of directors of the Arif Habib Securities in its meeting on Jan 31 decided to recommend to the general body to merge the company with and into Arif Habib Rupali Bank Limited (AHRBL).

The AHRBL is a majority-owned subsidiary of the AHSL.

The company holds 89.11 per cent of the total outstanding shares of the AHRBL.

The proposed merger will be subject to the approval by the concerned regulatory authorities — the State Bank of Pakistan and the Securities and Exchange Commission of Pakistan.

“I believe that it can take three to four months, but the Rupali Bank will become the eighth strongest bank in terms of higher equity,” Arif Habib, chairman, Arif Habib Securities, told Dawn.

“We have already met the condition of Rs6 billion required capital and the merger would push the equity level of the Rupali Bank to Rs13.25 billion,” he said.

In addition to the large capital injection, interests in a well-diversified pool of highly profitable enterprises and investments, the bank would inherit controlling interests into the large and successful companies, including asset management and securities brokerage.

The AHSL also announced its half-yearly results for the period ended Dec 31, 2006, on Jan 31, 2007.

The company posted a net profit after tax of Rs2,067 million for the half-year, which translates to EPS of Rs20.67 on a fully diluted basis.

The AHSL appears well-positioned for sustained growth and profitability going forward.

The company maintained a robust growth in the operating and pre-tax profits for the half-year, respectively, appreciated by 10 and 12 per cent.

This growth was despite a decline in earnings for the second quarter ended Dec 31, 2006, on account of weaker stock market performance during the quarter.