KARACHI, July 24: Another locally incorporated bank, Saudi Pak Commercial Bank, is in the process to be taken over by a consortium of foreign investors. Shaukat Tareen, who is leading the consortium, told Dawn on Tuesday that so far the State Bank had not approved any agreement regarding the sale of Saudi Pak Bank.

He however confirmed that both the consortium and the bank had expressed their intention to finalise a deal after due diligence with the approval of the central bank.

“We have agreed to buy the majority shares of the Saudi Pak Bank,” Shaukat Tareen said and added that the SBP would be approached for seeking its approval for initiating due diligence of the bank.

When contacted State Bank chief Spokesman Wasimuddin denied that the SBP had approved any agreement for the sale of the Saudi Pak Bank.

“Neither we are officially informed nor the SBP has approved any plan for the sale of Saudi Pak,” said the SBP spokesman.

A formal deal is expected after assessment of the accounts of the bank and valuation of its assets.

The report about SBP approval of the agreement on Tuesday triggered massive buying in Saudi Pak Bank shares on stock market with a turnover of 11 million shares.

“Saudi Pak Industrial and Agriculture Investment Company Pvt Ltd has informed us of their ‘intention’ to sell their shareholding to a consortium led by Shaukat Tareen,” said the KSE notification on Tuesday.

“Purchaser will be applying to the State Bank for permission to conduct a due diligence so that they could assess and evaluate the financial and legal position of Saudi Pak Commercial Bank,” the KSE notification said.

“Saudi Pak has requested Saudi Pak Bank to extend its cooperation to the said purchaser,” it added.

It further said; “The Saudi Pak Commercial Bank has not been involved in any discussion with the said purchaser.”

The sale of the bank will be the fourth major event in the banking sector after sale of Union Bank, PICIC Commercial Bank and Prime Bank.

The balance sheet of the Saudi Bank showed that the bank posted a loss after tax as Rs319 million in 2006. The first quarter of 2007 showed that the loss went higher as it reached Rs104 million in just three months.

The bank has been operating with 50 branches across the country and its assets in 2006 were Rs63.8 billion. Saudi Pak Industrial and Agricultural Company Limited has 59 per cent shares in the bank.