Monday May 5, 2008 MYT 6:52:11 PM

Maybank buys 15% stake of Pakistan bank for RM2.17bil

By Joseph Chin

KUALA LUMPUR: Malayan Banking Bhd is buying a 15% stake in Pakistan’s fourth largest bank MCB Bank Ltd - previously known as Muslim Commercial Bank Ltd - for RM2.17bil cash and will acquire another 5% later, which will make it a major shareholder.

Maybank announced on Monday the acquisitions would see both banks entering into a business cooperation agreement which would include Islamic banking, retail banking, credit cards and small medium enterprise banking as key partnership areas.

Last Saturday, Maybank entered into five share purchase agreements (SPAs) with five individuals and Muslim Commercial Bank Ltd Employees’ Pension Fund; The Muslim Commercial Bank Limited Provident Fund; Nishat Mills Ltd Employees Provident Fund Trust; and Adamjee Insurance Company Ltd for the acquisition of the 15% stake.

Maybank said the total purchase RM2.17bil was based on the audited net assets of MCB Group for the financial year ended Dec 31, 2007 of about RM2.82bil, strong historical profitability and earnings potential of the MCB Group; and the potential benefits to the Maybank Group.

The consolidated profit after tax of MCB Group was RM800mil.

It said MCB is the fourth largest bank in Pakistan by assets of approximately RM20.2bil and it operates 1,026 branches including eight Islamic banking branches within Pakistan and six branches outside the country.

“In addition to the recently announced proposed acquisitions in Indonesia and Vietnam, the proposed acquisition will enable Maybank and its subsidiaries to further expand its regional presence in key growth markets and to continue with its effort to establish itself as a financial services leader in the regional market,” it said.

Maybank said the proposed acquisition would provide the Maybank Group with the opportunity to position itself in a high growth and under-penetrated banking market with a large population.

The acquisition would also enable it to establish strategic partnerships with a leading commercial bank in Pakistan with strong growth potential and with the Nishat Group, one of the leading and diversified business groups in Pakistan of MCB.

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