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Pakistan-Bangladesh Alliance

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    Pakistan-Bangladesh Alliance

    Moderators & GuppiesThis news deserves a separate thread [/b]

    Another foreign bank packs up

    IFIC to buy Rupali Bank operations

    KARACHI: In a transaction between two Bangladesh-based banks, the International Finance Investment and Commerce Bank (IFIC) will soon acquire Rupali Bank’s Pakistan operations, Mohammed Abdullah, general manager of IFIC, confirmed to Daily Times on Friday.

    “Yes, the Bangladesh government has instructed the board of IFIC to take over the assets and liabilities of Rupali,” Mr Abdullah said. “But it is at very initial stages.” He declined to say how much the transaction would be worth.

    Banking sources said the transaction is likely to be finalised by August.
    Rupali Bank is wholly owned by the government of Bangladesh, while IFIC is 40 percent state-owned. The acquisition has not yet been approved by the State Bank of Pakistan (SBP).Rupali’s top management confirmed that the bank’s operations in Pakistan were under review, given new regulatory requirements from the SBP which require banks to maintain a minimum capital of Rs 1 billion.

    “The decision is yet to be finalised by the ministry of finance of the government of Bangladesh, but it is under very active consideration,” Mohammed Hasanat, country manager of Rupali Bank, told Daily Times. “As far as I know, Rupali may be merged with another bank, but I cannot confirm the name of any specific bank.”Mr Hasanat also said that if Rupali’s operations were not acquired by another bank, it could then function as a non-scheduled bank, as per SBP regulations since it does not meet capital requirements.

    Banking sources said the decision was taken in order to allow the merged entity to meet SBP minimum capital requirements, since neither has sufficient capital at present. Talks are said to have begun on the transactions about six months ago and once the acquisition is complete, sources said the merged entity will immediately open an additional two branches in Pakistan.Currently, Rupali operates a single branch in Karachi, while IFIC runs one branch in Karachi and one in Lahore. The banks focus on commercial banking and trade finance activities.

    IFIC had Rs 1.36 billion in deposits and Rs 1.21 billion in advances on its balance sheet as of December 31, 2001. The bank’s pre-tax profits dipped about 3% last year to Rs 60.67 million from Rs 62.49 million in 2000. The bank’s net assets stood at Rs 388 million.

    Rupali Bank, meanwhile, is yet to publish its 2001 balance sheet, although all other foreign banks have done so. According to its 2000 accounts, Rupali had total deposits of Rs 389.48 million and advances of Rs 110.85 million. The bank logged a pre-tax profit of Rs 39.28 million, up 43% from Rs 27.48 million in 1999. Rupali’s net assets stood at Rs 68.48 million on December 31, 2000.

    In recent months, Societe Generale sold its Pakistan operations to Meezan Bank, Emirates International was bought by Union Bank for $18 million and Doha Bank is also reportedly wrapping up its Pakistan operations.