KARACHI- Arif Habib Securities Limited (AHSL) is being merged with Arif Habib Rupali Bank Limited (AHRBL), The Nation learned on Friday.
It is also learned that a meeting of the board of directors of Arif Habib Securities Limited will be held on Thursday (May 10, 2007) to consider and approve æScheme of Amalgamation' including determination of the Swap Ratio for the merger of Arif Habib Securities Limited with Arif Habib Rupali Bank Limited, and to finalize and approve the transfer agreement between the two entities.
The group has acquired Bangladesh-based Rupali Bank's operations in Pakistan. Arif Habib Securities had acquired 90 per cent stake of Rupali Bank in Pakistan and renamed it as Arif Habib Bank Rupali Bank.
Rupali Bank was operating in Karachi only with one branch and it was not feasible for the bank to maintain four billion rupees paid up capital by December 2006 and to raise further this paid up capital to six billion rupees by December 2009.
Consequently, the Pakistani operations of the bank had been sold to the famous group, Arif Habib Securities. The acquisition of Rupali Bank and merger of AHSL with the bank is aimed at increasing the paid-up capital of the bank by the AHSL.
The central bank has set Rs six billion or 100 million dollars equivalent paid up capital limit for the domestic banks that would be achieved in phases by the year 2009, Chief Executive Arif Habib Investments Nasim Beg said in a recent interview to The Nation.
With the merger of the AHSL with the bank the paid-up capital of the bank would shoot up above Rs 13 billion, said Mr Beg.
He said that by December 2007 the number of the branches of Arif Habib Rupali Bank would be increased to 30 under its expansion plan.
The mergers and acquisitions in the banking sector would certainly stabilize the banks and it would strengthen the confidence of investors and customers of the banks, he said.
On the banking front it seems a good omen that Standard Chartered Bank Limited had acquired the Union Bank while a number of foreign banks are negotiating merger and acquisition with different Pakistani small and medium size banks, added Mr Beg.
Regarding merger of AHSL and AH Rupali Bank he said that the group wanted to integrate and expand its operations through this amalgamation.
Mr Beg said the economy of the country had been showing a strong growth while the regional economy had also been on the path of high growth.
As the banks are natural beneficiary of the growth in the economy the foreign buyers are aggressively acquiring majority stake along with management control in financial institutions - PR