ISLAMABAD, June 30: The NIB Bank here on Saturday celebrated the acquisition of 63.36 per cent outstanding shares of Pakistan Industrial Credit and Investment Corporation Ltd (PICIC) valuing at Rs20.5bn.

The management believes that the merged entity will contribute to the country’s vibrant economy by targeting middle class and providing credits to families to buy houses, vehicles and household appliances and support to entrepreneurs, big and small, to expand their businesses.

The commemoration of acquisition of a majority shareholding in PICIC by NIB Bank was celebrated here at a ceremony presided over by State Bank Governor Dr Shamshad Akhtar. The Executive Director and CEO of Temasek Holdings — which controls NIB Bank — Madam Ho Ching and the Board of Directors of NIB Bank had hosted the ceremony.

Out of the total stake, 56 per cent of the shares had been acquired from certain shareholders while 7.36 per cent from a tender offer to the general public. The total transaction was valued at $342m (Rs20.5 billion).

Through this acquisition, NIB Bank has also gained control of PICIC Commercial Bank, PICIC Asset Management Company, PICIC Insurance Ltd and PICIC Exchange Company.

The merged entity will be the seventh largest commercial bank with 215 branches and seven booths spread across the country.

Madam Ho Ching said that the increasing level of foreign investments was testimony to the growing international confidence in Pakistan.

“Our early investment in NIB Bank and now in PICIC gives us a broad-based exposure to this growing economy via the financial sector,” she observed.

Industry analysts think the merger allows NIB to position itself as a dominant player in the financial sector, covering the fields of commercial banking, investment banking, asset management and insurance.

Apart from sheer scale of operations and scope of existing products and services, the merged entity will also benefit from Temasek’s experience of changing financial paradigms across numerous countries in Asia, she said.

Madam Ho Ching emphasised that Temasek had a positive long-term view of Asia. “Over the last two years, the group has doubled their exposure to Asia from 19pc to 39pc.

Temasek believed in core principal investment themes, such as transforming economies and Pakistan is certainly one of the most promising countries in this respect,” she remarked.

The acquisition will generate around $250 million inflow into Pakistan from Singapore thus making it the largest foreign currency generating transaction in the country’s banking sector after Habib Bank.

President and CEO of NIB Bank Khawaja Iqbal Hassan said that the merged entity would aspire to be a truly universal bank serving each customer segment through its unique value propositions, embedded in the local market and committed to expanding the reach of banking services to the Pakistani masses.

NIB is financing the acquisition through a combination of a rights issue of Rs18.6 billion and a subordinated debt issue of Rs4 billion.