MCB Bank Buys RBS Pakistan Ops At PKR7.2B-Sources: WSJ

MCB Bank Ltd. (MCB.KA) has agreed to buy Royal Bank of Scotland Group PLC's (RBS) operations in Pakistan for PKR7.2 billion (US$87 million), people familiar with the situation said Monday, in the latest sale of Asian assets by the Scotland-based bank.

Earlier in the day, MCB Bank said in a statement to the Karachi Stock Exchange that its board had approved a proposal to acquire the assets, but didn't give any details other than to say the deal is subject to the signing of a share-purchase agreement and approvals from the State Bank of Pakistan and other regulators.

MCB, Pakistan's largest privately-owned bank by assets, is paying 0.73 times the book value of about PKR9.89 billion at the end of March of RBS's Pakistan assets, one person said.

Dutch bank ABN Amro, whose institutional and Asian assets RBS acquired in 2007, paid PKR13.8 billion or a four times price-to-book multiple for the bulk of the assets being sold to MCB in March 2007.

Besides MCB Bank, Habib Bank Ltd. (HBL.KA), Egypt's Orascom Telecom Holdings (ORTE.CI) and local JS Group had professed interested in buying the assets earlier. In April, Royal Bank of Scotland said Pakistan's central bank had allowed MCB and local bank Habib Bank to begin due diligence on its operations in the country.

"There are non-price considerations for RBS to choose MCB over others. MCB is perceived as the one which has the ability to close the transaction efficiently. The fact that it has no funding issue and that the assets are a strategic fit are a plus," said Soofian Zuberi, Bank of America Merrill Lynch's head of global markets sales for Asia excluding Japan.

Bank of America Merrill Lynch and KASB Bank advised MCB on the deal.

MCB, which will see its extensive network expanded with RBS's assets, will finance the acquisition with its own internal capital, another person familiar with the situation said. He said an official announcement of the deal is due within 24 hours. "The buyout is beneficial for MCB Bank as RBS has an extensive consumer base," said Mohammed Imran, head of research of First Capital Securities Ltd.

For more on this article, please click on the following link: MCB Bank Buys RBS Pakistan Ops At PKR7.2B-Sources: WSJ

Pakistan’s Richest Man Defies Terrorism to Expand Bank Empire: Bloomberg

By Yoolim Lee and Naween A. Mangi

Dec. 3 (Bloomberg) -- On a September evening when many of Pakistan’s 165 million people were breaking their fast during the Muslim holy month of Ramadan, billionaire Mian Mohammad Mansha, the country’s richest man, was deciding whether to buy an Indonesian bank.
A phone call to his Lahore office interrupted him: Turn on the television, his son Hassan implored. The Marriott Hotel in Islamabad was in flames after terrorists had detonated a truck packed with explosives. The blast, in a security zone less than a kilometer from the presidential residence, killed 53 and injured 266.
“It was terrifying,” says Mansha, 61, chairman of the Nishat Group financial, textile and cement-making empire, who says he stays at the Marriott when he’s in the capital. Just hours before the blast, Asif Ali Zardari, Pakistan’s new president, had vowed to rid the country of the “cancer” of terrorism.
As Pakistan battles extremist-inspired violence and its worst economic crisis in a decade, Mansha says he’s keeping Nishat Group’s expansion on track.
At home, where his MCB Bank Ltd. is the biggest lender by market value, he was in talks in October to buy a rival he declines to name. He’s looking at four banks in Indonesia, the only country with a bigger Muslim population than Pakistan.
By May, he’ll open a machinery and automobile leasing company in Azerbaijan, a predominantly Muslim country between Iran and Russia. He’s eyeing Kazakhstan and the Mideast for banking. And he’s also looking at Canada, with a Pakistani community estimated at more than 300,000 people.
Following India
Mansha started building in the decades of upheaval that followed Pakistan’s split with India after their independence from Britain in 1947.
Now he’s taking a cue from entrepreneurial Indians. Billionaire Mukesh Ambani, chairman of Reliance Industries Ltd., and Ratan Tata, chairman of Tata Group, expanded as India grew at an average annual rate of 8.8 percent in the five years ended on March 31, 2008.
Pakistan almost kept pace with its larger neighbor: Its gross domestic product rose at an average of 7 percent during the five years that ended on Dec. 31, 2007.
“I want to be the first Pakistani, like some of our counterparts in India, to really go out and show that we Pakistanis can even be successful outside Pakistan,” Mansha says two days after the Marriott bombing.
Mansha is optimistic during a dire period for Pakistan.

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MCB Plans Takeovers as Crisis Pushes Pakistan's Banks to Merge: Bloomberg

By Naween A. Mangi

Oct. 21 (Bloomberg) -- MCB Bank Ltd., Pakistan's biggest by market value, plans to acquire domestic rivals as the nation's deepest economic crisis in a decade and tighter central bank rules push more lenders to consolidate.

``We have excess capital and we want to deploy it in assets that make sense for us,'' Chief Executive Officer Atif Bajwa said in an interview in Karachi yesterday. He didn't say which banks he was evaluating. ``The advantage of looking to get something now is that asset prices are low.''

Central Bank Governor Shamshad Akhtar last month increased banks' capital requirements almost fourfold within five years to spur mergers and reduce risk. Bajwa will need to grapple with Asia's highest borrowing costs and a faltering economy that forced Pakistan to seek a $10 billion bailout to avoid default.

``There's going to be a domestic scenario of acquisitions and mergers in which MCB will be a prominent player,'' said Saad Bin Ahmed, head of research at Karachi-based Capital One Equities Ltd., who rates MCB's stock ``hold.'' ``MCB is part of a group which is financially very strong.''

For more on this article, please click on the following link: MCB Plans Takeovers as Crisis Pushes Pakistan's Banks to Merge: Bloomberg

Maybank may raise stake in MCB in August: Daily Times

KUALA LUMPUR: Malaysia's Maybank is set to buy another 5 percent of Pakistan's MCB Bank as early as next month, in a deal estimated at $218 million, sources familiar with the matter said Thursday.

Malayan Banking Bhd, Malaysia's leading lender, bought a 15 percent stake in MCB Bank, Pakistan's top lender, for $680 million in May.

That deal included a clause whereby Maybank was obliged to buy up to another 5 percent of MCB Bank shares within one year of the first transaction.

The price for this stake was then agreed at Rs 490 per share, plus holding cost, with the total price not exceeding Rs 510 per share.

"The deal is very much on, the talks have started, and if all goes well, it should materialise sometime in August," said a source close to the transaction.

A spokesman at Maybank declined comment. A spokesman at MCB Bank said any stake purchase by Maybank would be in line with the previous agreement, but he did not give a time frame for the new purchase.

Shares in MCB Bank were up 5 percent at Rs 256.3.

For more on this article, please click on the following link: Maybank may raise stake in MCB in August: Daily Times

Pakistan's Stocks Rise After 20 Billion Rupee Fund Is Activated: Bloomberg

By Farhan Sharif

July 25 (Bloomberg) -- Pakistan stocks rose to a two-week high, with the index among only two Asian winners, after the bourse activated a 20 billion rupee ($282 million) government- backed support fund to halt this year's 21 percent slide.

The Karachi Stock Exchange 100 index rose 123.94, or 1.1 percent, to 11,280.62 at 10:14 a.m. local time, the highest since July 11. MCB Bank Ltd., the nation's biggest lender by market value, was among at least seven of the 100 companies on index that rose by the maximum 5 percent.

The index has risen 7.5 percent since July 22, when Finance Minister Syed Naveed Qamar visited the exchange to announce government backing for the fund to start operating. He spoke after a 15-day slump triggered violent protests last week.

``The initiation of the fund as announced by the minister added to investors' confidence,'' said Farhan Rizvi, an economist at JS Global Capital Ltd. in Karachi. ``The sentiment has supported the market to rise further, but it might see some correction in the later hours of the day due to the fast recovery in the last few days.''

Pakistan and the Sri Lanka Stock Market Colombo All-Share Index were the only measures to gain so far today. The MSCI Asia Pacific Index lost 2.2 percent to 133.79, the most since June 12 and extending its decline this year to 15 percent.

The fund formed by a group of institutions including government agencies will eventually be increased to 50 billion rupees, according to earlier statements by the exchange. Initially, it will be run by the state-owned National Investment Trust but later it will be turned into an ``open-end fund,'' said Nasim Beg, who manages the equivalent of $300 million in stocks and bonds as chief executive officer at Arif Habib Investment Management Ltd. in Karachi.

`Technically Active'

``The fund is technically active from today but will only start buying if the market falls 20 percent within 30 days,'' Beg said.

For more on this article, please click on the following link: Pakistan's Stocks Rise After 20 Billion Rupee Fund Is Activated: Bloomberg

Using MCB Bank to Leverage Political Crisis in Pakistan: Seeking Alpha

J. Christoph Amberger

To leverage political crisis in Pakistan, use MCB Bank ADRs (MCBBI.PK), Pakistan’s most profitable bank. It has a return on average equity of 38 percent and loan profitability of 8 percent. The bank has a market share of 8 percent in terms of assets. It has 1,026 branches across the country and more than 4 million customers.

Baltimore — [TFN]: Pakistani stocks have fallen to their lowest level in almost 14 months on rumors involving political instability surrounding President Pervez Musharraf potential resignation. It also didn’t help that militant Islamists blew up the Danish embassy. Six Pakistani civilians were sacrificed to avenge the perceived blasphemy committed by Danish cartoonists two years ago.

The Karachi Stock Exchange’s 100-share index has dropped to lows not seen since early April, 2007, losing about 25 percent or nearly 3,000 points from a record high in April. The Pakistani rupee has lost more than 10% of its value during the last two weeks, while the Pakistani trade deficit has exceeded $10 billion, due to rising oil prices.

For more on this article, please click on the following link: Using MCB Bank to Leverage Political Crisis in Pakistan: Seeking Alpha

Maybank Banking On Pakistan Expansion: Forbes

Vivian Wai-yin Kwok

HONG KONG -"While most Western banks are taking a pause from expansion to solve their credit problems at home, Malayan Banking is accelerating its acquisition ambitions, in an attempt to strengthen its regional footprint. Malaysia's biggest lender said Monday it would buy up to 20% of Pakistan's MCB Bank for $933 million, its third takeover in the region in two months.

Malayan Banking (other-otc: MLYBY - news - people ), widely known as Maybank, said in a filing with the stock exchange in Kuala Lumpur on Monday that it had agreed to buy 15% of MCB Bank, Pakistan's fourth-largest bank by asset value, for 2.17 billion ringgit ($685.5 million). Maybank also has secured the right to buy an additional 5% stake in MCB Bank for a maximum of $247 million from three other institutional investors, potentially bringing its ownership up to 20%.

"It is an attractive opportunity for us to enter a high growth and profitable market. It is extending Maybank's reach in South Asia," in line with its plan to become a key regional player, Chief Executive Abdul Wahid Omar of Maybank told reporters. Volatility in the global financial markets notwithstanding, Pakistan's economic outlook remains steady, and there is "limited execution risk," he added."

For more on this article, please click on the following link: Maybank Banking On Pakistan Expansion