Summit Bank has received approval from Pakistan’s central bank to conduct due diligence on Burj Bank, it said in a stock exchange filing, in the latest bid for the unlisted lender, which is seeking to boost capital through a stake sale.
The acquisition of a majority shareholding in Burj Bank would fit the long term strategy of Summit Bank, which is planning to convert its operations to conform to Islamic principles that include bans on interest and gambling.
Burj Bank, one of the country’s five full-fledged Islamic banks, held 4.4 billion rupees ($42 million) in paid up capital as of December, compared with the regulatory minimum of 10 billion rupees.
Last month, Burj Bank said it had shortlisted three financial institutions to conduct due diligence on a non-exclusive basis. It also received an extension from the central bank to meet the mimimum capital requirement until June 30.
The Islamic lender has previously attracted interest from state-owned National Bank of Pakistan and MCB Bank Ltd , both conducting their own due diligence in 2014, but a sale has not materialised.
The largest shareholders of Burj Bank are Bahrain’s Bank Alkhair with a 37.9 percent stake and the Jeddah-based Islamic Corporation for the Development of the Private Sector, which holds a 33.9 percent stake.
Summit Bank Ltd is one of the fastest growing commercial banks of Pakistan, which, in a very short span of time, has expanded its network across the country and built an infrastructure based on state of the art “Risk Management Framework” as well as “IT platform.” Also targeting to be a universal bank in terms of providing products and services in all key segments of banking i.e. Corporate and Investment Banking, Trade Finance, Commercial Mid Market/SMEs, and Consumer Banking, it commenced its operations in August 2006.
Pakistan operations of Rupali Bank were acquired by Arif Habib Securities Limited under the Scheme of Amalgamation approved by the State Bank of Pakistan. On March 31, 2010, Suroor Investments Ltd acquired 59.41 percent stake in Arif Habib Bank.