KARACHI, April 25: Pakistan will be the least beneficiary of proposed merger of ABN Amro and Barclays banks. However, India would get more jobs and the rest of the world would see a cut in jobs.

Pakistani bankers expect a long-term impact on banking in the country, but say that in the short-term, there would only be a “change of the name.”

Bankers said though the proposed merger between the ABN Amro and Barclays would create largest institutional asset manager and the world’s eighth largest wealth manager, Pakistan would get the least benefit out of this deal.

Some bankers said Barclays would bring a number of new products which were still to be introduced in Pakistani market.

“Barclays will come through ABN Amro, but still it will have a great impact on banking sector, giving more confidence and stronger look of the banking in Pakistan,” said Mairajuddin Aziz, a senior banker at Saudi-Pak Commercial Bank.

He expects that Barclays would require more access in Pakistani market to compete with other foreign banks and that might result in more acquisition in Pakistan.

ABN Amro is already in process of acquiring Prime Commercial Bank.

Another banker said due to small equity market and almost non-existing debt market, Pakistan would less likely be drawing benefit from the investment banking wing of the merged institution which would have an expertise and products i.e. commodities, FX, equities, M&A, corporate broking, structured credit and private equity.

However, commercial banking group will be able to position itself by catering to the needs of deposit-based customers in a more efficient manner due to enhanced expertise and improved risk management skills.

“Barclays’ expertise in credit card would compliment the existing ABN cards portfolio and will create new niches in Pakistani market which appears to be fully tapped by the banks, like Citi, Al-Falah, SCB and MCB,” said R.M. Alam, a senior banker at the Bank Al-Falah.

The merger of ABN and Barclays expects huge cost synergies after the merger is complete. However, first choice of relocation of the service provider would be India where newly-merged bank will get support services and back office support, especially in IT area.

“The reduction in staff is a necessary part of the envisaged synergies from the combination of the two banks. Part of the expected staff reduction will be through establishing shared services and off-shoring those positions to low-cost locations, such as India where new staff will be recruited at ABN Amro’s existing ACES operations,” said the merger agreement.

Another expert on banking said Pakistan would get benefit in the field of wealth management and credit cards.

“Wealth management is negligible in Pakistan. Barclays being one of the largest wealth managers would certainly penetrate into the market,” said Mohammad Suhail, Director, Equity Broking JS.

He did not see short-term impact on banking and said there would be no merger activity in the country, just a change of name would be visible on ABN Amro’s foreheads.