KARACHI: The National Bank of Pakistan (NBP) has proposed to commence due diligence of Burj Bank ‘very shortly’ and to complete the task in a ‘brief time-frame,’ a press release by the bank stated on Monday.
The NBP had first conveyed to the stock exchange its intent to conduct due diligence of Burj Bank which it marked as one of the country’s five full-fledged Islamic banks.
“The NBP, listed on the stock exchanges, is Pakistan’s largest public sector bank with a network of over 1,350 online branches nationwide,” the bank said in the press statement and went on to mention that Burj Bank has a network of 75 branches across the country.
Burj Bank is backed by strong investors from the Middle East and Saudi Arabia, like ICD, Jeddah (the private sector investment arm of Islamic Development Bank).
Banking sources said that the NBP had shown its interest in Burj Bank after the earlier plans of MCB Bank to acquire majority shareholding of 55 per cent in Burj Bank were dropped as the Mansha group-owned MCB declared that it had opted to set up its own wholly-owned Islamic banking subsidiary.
As smaller banks are scrambling to meet minimum capital requirement and other regulations of the SBP, banks with foreign parents are said to be looking up to their holding banks to pump in equity, while smaller capital with lesser means has no option but to combine capital and resources with other small banks in the same predicament.
Other smaller banks which do have means to come up to the SBP requirements are on the hunt to seek controlling interest in smaller banks in order to grow taller and stronger in a competitive environment.
On Dec 26, SBP granted permission to JS Bank for initiating due diligence of KASB Bank Ltd, which the company Secretary of KASB Bank told the stock exchange “will commence shortly.”