KARACHI April 2 The NIB Bank on Friday announced that it has sold its 27 per cent stakes or 6.750 million ordinary shares of the National Fullerton Asset Management Company (Nafa) to the National Bank of Pakistan (NBP) to generate liquidity of over Rs268 million.

The NIB bank issued a release informing stakeholders that it has sold Nafa shares at a price of Rs39.83 per share.

The bank said the transaction was made on March 31. The NIB Bank's board of directors has already accorded approval for this sale in its meeting on Jan 5.

The sale would boost profitability of the bank. The NIB Bank has generated Rs268.852 million from this transaction, said the bank.

Most of banks, except for five major banks, including HBL, NBP, ABL, MCB Bank and UBL, have been facing tough time to increase their deposit base finding it hard to chase the State Bank's enhanced target for paid-up capital.

The race to raise deposit increased cost of deposits for many banks, making it more difficult to earn higher profit while five major banks have monopoly in the industry.

The NIB Bank, along with the NBP and the Alexandra Fund Management Ltd, had founded Nafa in 2005.

The Nafa currently manages eight fixed income and equity open end funds.

Following acquisition of Picic by the NIB in December 2007, the NIB also acquired 100 per cent ownership of Picic Asset Management Company. Consequently, since 2007, the NIB acquired interest in two asset management companies.

Under relevant non-banking finance companies laws, a group cannot hold more than one asset management service licence.

“In order to comply with the NBFC laws and the directives of the SECP, the divestment of its stake in Nafa will allow NIB to continue its focus on asset management business through its 100pc owned subsidiary, Picic AMC.