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WEEKLY
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| Mauritius-based firm buys 59pc Mybank shares |
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Friday, October 02, 2009
By Saad Hasan
KARACHI: Loss-ridden Mybank on Thursday announced the sale of 59.34 per cent shares to a Mauritius-based investment firm, which had recently acquired Arif Habib Bank.
In a notice issued to the Karachi Stock Exchange (KSE), Mybank said a sale-purchase agreement was executed on September 30 to sell stocks to Suroor Investments Limited at Rs8 per share.
The deal had been sealed at a premium over the price of Mybank’s listed share, which closed at Rs5.42 at the KSE on Thursday, Hussain Lawai, President of AHB said.
He said the acquisition would help AHB to expand its outreach. “Mybank has 80 branches and combined with 34 branches of AHB the network will be strengthened across the country.”
Suroor Investments, owned by a Dubai sheikh who also has a stake in Dubai Islamic Bank, signed a share purchase agreement on June 30 to buy 60 per cent shares of AHB.
Lawai, who had wooed a consortium of investors to buy Pakistan banks, said the paid-up capital of AHB would rise after Mybank’s acquisition. “Mybank has already done all the provisioning against bad loans. That is why its equity was reduced.”
Mybank posted a loss of Rs996 million in the first half of 2009, something which reduced its capital to Rs4.6 billion. The capital base of AHB is also around Rs5bn, which is just enough to meet the paid-up capital requirement of State Bank of Pakistan.
AHB recorded a loss of Rs568m in the six months to June against a profit of Rs212m made in the same period of 2008.
Seasoned banker Lawai, who was the first president of the privatised Muslim Commercial Bank (MCB), made a comeback to Pakistani banking industry last year after a long gap.
He has been heading AHB as President and CEO since late 2008. AHB would also gain from the established customer base of Mybank, Lawai said.
The AHB deal came at a time when the SBP was pushing the idea of consolidation for smaller banks, which were facing difficulty in raising deposits and earnings as the economy slowed down.
Suroor’s acquisition of AHB for Rs9 per share was a far cry from AHB’s IPO of Rs21 per share early last year.
The financial downturn and its economic repercussions have turned out to be devastating for some other smaller banks, which have lost their equity to rising non-performing loans.
Atlas Bank and Silk Bank have called off a planned merger, which was needed by both to raise their paid up-capital to meet the SBP’s MCR of Rs5 billion for 2008. Both banks have been allowed until December 2009 to meet the MCR.
After seeing that even the global banking system was in crisis, the SBP revised the MCR for banks in Pakistan. Now banks are required to have MCR of Rs6bn by end-2009 and then they have to increase it by Rs1bn each year till 2013.
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ISSN 1563-9479 
