Feb 13 Pakistan's MCB Bank will take a
55 percent stake in Islamic lender Burj Bank, alongside an
additional investment by the private sector arm of Jeddah-based
Islamic Development Bank, according to a filing with
the stock exchange.
The move comes amid increased activity in Pakistan's Islamic
banking sector, with regulators stepping up development efforts
and lenders expanding operations in the world's second-most
populous Muslim nation.
MCB said it had agreed with majority shareholders of Burj
Bank to invest in new and existing shares for a controlling
stake in the Islamic lender, which held assets worth 44.7
billion rupees ($424.7 million) as of December.
No price figure was given for the acquisition.
The deal, which still requires regulatory approval, would
include an un-specified additional investment by the IDB's
Islamic Corporation for the Development of the Private Sector,
which already holds a 33 percent stake in un-listed Burj.
Other majority shareholders include Bahrain's Bank Alkhair,
which held a 36.9 percent stake in Burj as of December 2012.
Burj Bank is the smallest of five full-fledged Islamic banks
in Pakistan with a network of 75 branches, while MCB operates
the country's sixth largest Islamic window with 28 branches.
MCB plans to spin off its Islamic window into a separate
subsidiary with 10 billion rupees in paid-up capital, using its
existing 27 Islamic banking branches to form the new entity.
Last month, the central bank named a new deputy governor to
focus on Islamic banking and enlisted renowned scholar Muhammad
Taqi Usmani to its sharia board, part of efforts to improve
consumers' perception of Islamic finance.
Such steps aim to help government plans to double the
industry's branch network and reach a 15 percent share of the
banking system in the next five years.
As of September, Islamic banks held a 9.5 percent share of
total banking assets in Pakistan, compared to around 25 percent
in the Gulf Arab region.
($1 = 105.2550 Pakistani rupees)
(Editing by Kim Coghill)