The Express Tribune > Business > Pakistan operations: Meezan Bank agrees to acquire HSBC Bank Oman

By Our Correspondent Published: June 27,2015

KARACHI:

Pakistan operations: Meezan Bank agrees to acquireHSBC Bank Oman

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Owned 51% by HSBC Holdings, HSBC Bank Omans operations in Pakistan consist of only one branch. PHOTO: REUTERS

Meezan Bank has signed an agreement with HSBC Bank Oman toacquire the latters banking business in Pakistan, a stock filing said on Friday.Owned 51% by HSBC Holdings, HSBC Bank Omans operations in Pakistanconsist of only one branch. At the end of the first quarter of 2015, the bank hadgross assets amounting to Rs4.1 billion. The acquisition is expected to

materialise in the second half of 2015 subject to regulatory approvals.

HSBC Bank Oman currently operates in Oman, India and Pakistan. It decidedin 2012 to sell off its India and Pakistan operations. It signed an agreement tosell its banking business in India to Doha Bank QSC in April last year.Separately, HSBC Oman announced in November that it was in discussionwith Meezan Bank regarding the possible sale of its operations in Pakistan.

Read: Different categories: Meezan Bank wins several awards

Earlier on, Meezan Bank also acquired Pakistan branch operations of HSBCBank Middle East in October. This resulted in all customers of HSBC Pakistanautomatically becoming customers of Meezan Bank.

An indirect, wholly owned subsidiary of HSBC Holdings, HSBC Bank Pakistanconsisted of as many as 10 branches and had total assets of Rs48 billion at theend of 2013.

Meezan Bank stated at the time it intended to make the operations of HSBCShariah-compliant while ensuring that the existing customer base continued toreceive uninterrupted banking services.

Meezan Bank already had the experience of acquiring a foreign bank andconverting its operations from conventional to Islamic. It acquired SocieteGenerale in Pakistan through a similar transaction in 2002.

According to Reuters, the sale of HSBC Bank Pakistan was part of a strategyby Europes biggest bank to exit from countries where it is unprofitable or lacksscale.

Being the second most populous Muslim country, Pakistan has been aprofitable market for Islamic banks. As many as five Islamic banks operate inPakistan while 14 conventional banks offer Islamic banking services throughwindow operations.

Read: Inside job: Millions looted as security guard breaks into bank lockers

Deposits of Islamic banking institutions crossed the Rs1-trillion mark for thefirst time, registering year-on-year growth of 23.3% in 2014. Meezan Banksdeposits rose 31.2% to Rs380.4 billion at the end of 2014. According to thelatest quarterly results, Meezan Bank recorded growth of 18.7% in its after-taxprofit that stood at Rs1.3 billion for January-March.

Like HSBC Bank Pakistan and HSBC Bank Oman, Europe-based BarclaysBank has also left the Pakistan market for good by selling its operations toHabib Bank recently.

Published in The Express Tribune, June 27th, 2015.

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the SkunkJun 27, 2015 - 11:57AMReply

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Viva! Bravo! Meezan bank is strongly going ahead. All the very best fortunes for the future. Salams9

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