Banks acquisition, merger imminent in 2015

Banks acquisition and mergers are likely to be carried out in the year 2015 that will further consolidate banking industry with investment and divestment. In 2014, there was merely one acquisition of HSBC Bank by Meezan Bank but still many banks are going into due diligence process and their mergers and acquisitions will take place in the current year of 2015.

Among them, the merger of Burj Bank could not be made in 2014 despite MCB Bank had conducted its due diligence. The bank was later approached by National Bank of Pakistan for the same exercise with the intention to acquire the whole bank.

Similarly, KASB Bank with vulnerable financial position was put on moratorium by the central bank for six months but three major banking companies including Askari Bank Limited, Sindh Bank Limited and JS Bank Limited have been granted Non-objection Certificate (NOC) to carry out due diligence which some of the banking companies started off.

Another foreign bank, Barclays is interested to wrap up its operation in Pakistan and presently Habib Bank Limited is conducting its due diligence.

Besides, SME Bank which was reportedly got merged into National Bank of Pakistan (NBP) did not witnessed any development in the past one year and it somehow continued its operation within the targeted market despite limited resources. The two banks - Burj and KASB - could be get merged with other banks which are interested in these banking companies this year. Whereas, Barclays Bank will roll back its business in Pakistan completely if banking company receives its targeted offer by any of the interested party, any commercial bank. The two banks - Silk Bank and BankIslami will further improve their paid-up capital requirement in future whereas banks such as Summit Bank could also raise capital from equity market against the proposed right shares to which it already received advanced injection

from sponsor investors.