Bank Islami Limited to acquire KASB Bank Limited

29th April 2015

 
 

Bank Islami, acting upon an amalgamation scheme by State Bank of Pakistan (SBP), will be moving a resolution to acquire KASB Bank; upon approval from its board and regulatory authorities, the Islamic banking institution will acquire 105 branches of KASB Bank in Pakistan, worth a total equity of Rs. 1.3 Billion.

KASB Bank was placed under a moratorium in November 2014 by SBP when it was unable to meet minimum capital requirements for a banking institution in Pakistan. Its customers were already facing problems due to the moratorium, with frozen bank deposits and withdrawal limits of Rs. 300,000 from each account.

A recent spike in KASB Bank’s stock value was witnessed in the previous weeks when speculations surfaced of major Chinese investment to save the bank from the moratorium. However, investor spirit was dampened after disclosure of SBP’s amalgamation scheme; the sale value for KASB Bank is also being set at a nominal amount for immediate purchase.

Bank Islami presently operates 213 branches in Pakistan and maintains a total equity of Rs. 6.2 Billion. With the acquisition of KASB Bank, their footprint will increase to 318 branches; this would help strengthen Bank Islami’s market reach in the Islamic Banking segment.

 

 
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