The process of due diligence for merger of KASB Bank with Atlas Bank will be completed within three weeks, KASB Bank President Muneer Kamal told The News on Monday.
“Both banks are still carrying out valuation of each other’s balance sheets before the merger takes place,” he said. “Due diligence takes time and I think we are pretty much on track,” he said, referring to reports that the merger has been held up for some reasons. “It will be completed within 15-20 days.”
KASB and Atlas banks earlier announced a merger of their operations in a bid to cope with tight liquidity environment for small banks.The merged entity with an equity of over Rs12 billion and 110 branches will have sound financial standing and wider reach to woo depositors, Atlas Bank President Aziz Rajkotwala said.
The merger was supposed to be finalised by this year’s end but the banks are still evaluating the swap ratio in the merged entity, he said. “We are assessing who is going to have how many shares.”
State Bank of Pakistan (SBP) has been pushing for mergers and acquisitions to consolidate the banking industry as high inter-bank lending rates in recent times have compounded difficulties of small banks, which were already battered by poor economic conditions.
Meanwhile, Arif Habib Bank announced on Monday that the terms of agreement have been agreed with a consortium which intends to take over its operations.In a notification to Karachi Stock Exchange (KSE), it said as per the terms the consortium led by Husain Lawai will increase the authorised capital of the bank to Rs25 billion.
The consortium can have 51 or 60 per cent of the increased paid-up capital of the bank but it will have to confirm with Arif Habib Securities before January 15, 2009 if it intends to subscribe 60pc of increased paid-up capital.
“Bank shall issue further capital increasing the initial paid-up capital by an amount equal to investment by way of issue of shares other than rights,” it said, adding subscription price of investor shares shall be Rs10 per share.
It further said the bank will apply to SBP for commencement of due diligence along with investors. “The entire transaction is expected to be completed by February 28, 2009, unless another date is mutually agreed upon by the parties.”
“Both banks are still carrying out valuation of each other’s balance sheets before the merger takes place,” he said. “Due diligence takes time and I think we are pretty much on track,” he said, referring to reports that the merger has been held up for some reasons. “It will be completed within 15-20 days.”
KASB and Atlas banks earlier announced a merger of their operations in a bid to cope with tight liquidity environment for small banks.The merged entity with an equity of over Rs12 billion and 110 branches will have sound financial standing and wider reach to woo depositors, Atlas Bank President Aziz Rajkotwala said.
The merger was supposed to be finalised by this year’s end but the banks are still evaluating the swap ratio in the merged entity, he said. “We are assessing who is going to have how many shares.”
State Bank of Pakistan (SBP) has been pushing for mergers and acquisitions to consolidate the banking industry as high inter-bank lending rates in recent times have compounded difficulties of small banks, which were already battered by poor economic conditions.
Meanwhile, Arif Habib Bank announced on Monday that the terms of agreement have been agreed with a consortium which intends to take over its operations.In a notification to Karachi Stock Exchange (KSE), it said as per the terms the consortium led by Husain Lawai will increase the authorised capital of the bank to Rs25 billion.
The consortium can have 51 or 60 per cent of the increased paid-up capital of the bank but it will have to confirm with Arif Habib Securities before January 15, 2009 if it intends to subscribe 60pc of increased paid-up capital.
“Bank shall issue further capital increasing the initial paid-up capital by an amount equal to investment by way of issue of shares other than rights,” it said, adding subscription price of investor shares shall be Rs10 per share.
It further said the bank will apply to SBP for commencement of due diligence along with investors. “The entire transaction is expected to be completed by February 28, 2009, unless another date is mutually agreed upon by the parties.”
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