Islamabad: Pakistan’s MCB Bank will take a 55 percent stake in Islamic lender Burj Bank, alongside an additional investment by the private sector arm of Jeddah-based Islamic Development Bank, according to a filing with the stock exchange.
Burj Bank is the smallest of five full-fledged Islamic banks in Pakistan with a network of 75 branches, while MCB operates the country’s sixth largest Islamic window with 28 branches.
The move comes amid increased activity in Pakistan’s Islamic banking sector, with regulators stepping up development efforts and lenders expanding operations in Pakistan.
MCB said it had agreed with majority shareholders of Burj Bank to invest in new and existing shares for a controlling stake in the Islamic lender, which held assets worth Pakistan Rs 44.7bn ($424.7m) as of December. No price figure was given for the acquisition.
The deal would include an un-specified additional investment by the IDB’s Islamic Corporation for the Development of the Private Sector, which already holds a 33 percent stake in un-listed Burj. Other majority shareholders include Bahrain’s Bank Alkhair, which held a 36.9 percent stake in Burj as of December 2012.
MCB plans to spin off its Islamic window into a separate subsidiary with Rs 10bn in paid-up capital, using its existing 27 Islamic banking branches to form the new entity.
As of September, Islamic banks held a 9.5 percent share of total banking assets in Pakistan, compared to around 25 percent in the Gulf Arab region.
Reuters
