KARACHI, Oct 23: Mashreq Bank — the foreign bank operating in Pakistan — has entered into an amalgamation agreement with Crescent Investment Bank Limited (CresBank) and International Housing Finance Limited (IHFL), CresBank announced on Wednesday.

The agreement signed and sealed on Tuesday, stipulates that CresBank and IHFL would be amalgamated with Mashreq Bank, as joint venture partners. The arrangement would create a “locally incorporated banking company,” which would be a stock market listed entity.

Crescent Investment Bank Limited which unveiled the outlines of the plan on Wednesday, stated that Mashreqbank psc — a banking company incorporated under the laws of United Arab Emirates and having its registered office at Deira, Dubai, UAE, — had in terms of an agreement decided, subject to the approval of State Bank of Pakistan and other regulatory authorities, to amalgamate its Pakistan branches into a locally incorporated company under the laws of Pakistan with the objects of carrying on banking business.

Market had, since long, been rife with rumours about the possible “acquisition” of Mashreq Bank by Crescent Investment Bank. But the arrangement disclosed to have been entered into between the foreign bank, the local investment bank and a housing finance company, appeared to be out of the ordinary. In recent developments regarding foreign banks, first Pakistan branches of Bank of America and then those of Emirates Bank were acquired by the locally listed private commercial bank — Union Bank Limited.

At the end of previous financial year ended December 31, 2001, CresBank held Rs500 million in paid-up capital. It also carried accumulated losses of Rs357 million on its balance sheet, stemming mainly from the huge after tax loss of Rs807 million suffered by the bank in 2001. Total assets of CresBank at end- December 2001, stood at Rs5.2 billion.