"Meezan Bank has entered into an agreement with HSBC Bank Middle East Limited (HMBE), an indirect wholly-owned subsidiary of HSBC Holding, to acquire HSBC''s Pakistan operation through a process of amalgamation," they added. The amalgamation is expected to be completed during the second half of 2014, however, the deal is subject to regulatory and other relevant approvals including the approval of direct shareholders of Meezan Bank and HMBE.
Meezan Bank has experience of acquiring a foreign bank and accordingly converting its operation into Islamic banking in 2002 when it acquired the banking operation of Societe Generale in Pakistan and through a transaction very similar to the one being contemplated. Meezan Bank managed the SG Pakistan transaction in a very professional and seamless manner. Meezan Bank has also sent this information to Karachi Stock Exchange in accordance with the section 15D (1) of the Securities Exchange Commission Ordinance, 1969 and listing regulations No 35 of KSE. As per announcement, Meezan bank will convert conventional operations of HSBC Pakistan into Islamic banking and ensure that customers continue to enjoy uninterrupted banking services.
In April 2012, under the restructuring plan Hong Kong and Shanghai Banking Corporation (HSBC) decided to sell out its stakes in the Pakistani financial market and finally signed a sale purchase agreement with JS Bank, however the deal lapsed in October 2013 as reportedly JS could not manage to secure regulatory approval for the deal. Meezan Bank currently operates 351 branches and is the largest Islamic bank in the country.
Reuters adds: HSBC said it has agreed to sell its banking business in Pakistan to Meezan Bank Ltd, seven months after failing to win regulatory approval to sell it to another company. The Pakistan unit has 10 branches and had assets of about $455 million at the end of 2013, HSBC said. It did not put a price on the deal and said it was subject to regulatory approval. It is expected to complete in the second half of 2014. The sale continues a retreat by HSBC from countries where it lacks scale. Europe''s biggest bank has closed or sold more than 60 businesses in the last three years in an effort to cut costs and complexity.