Pakistan's Bank Alfalah nears acquisition of Saudi stake in Samba Bank
Bank Alfalah, Pakistan’s fourth-largest bank by assets and owned by the
UAE-based Abu Dhabi Group, is nearing the final stages of acquiring the Saudi
National Bank’s majority stake in Samba Bank, according to Bloomberg. This move
is part of the bank’s strategy to pursue further acquisitions and bolster its
growth amidst Pakistan's ongoing economic challenges.
In an interview with Bloomberg, Bank Alfalah’s CEO, Atif Aslam Bajwa,
expressed the bank's intent to capitalize on potential opportunities. "We
want to be in a position to seize one-off opportunities as they arise,"
Bajwa said. "We are focusing on both organic and inorganic growth."
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Alfalah to acquire 100% stake in Samba Bank
Bank Alfalah has experienced significant growth, becoming the second-fastest
in deposit increases among Pakistani banks over the past five years. This
growth contrasts with Pakistan's economic instability, marked by frequent loans
from the International Monetary Fund (IMF) to manage its $26 billion debt for
the current fiscal year. The country anticipates the IMF’s executive board to
approve a new $7 billion loan program soon.
Additionally, Pakistan has sought China’s assistance to extend the repayment
period of some of its debts for added financial flexibility.
Bajwa emphasized the importance of the IMF program for restoring global
confidence. "Achieving the IMF program is crucial as it will help restore
confidence internationally," he noted.
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Bank grants authorization to Bank Alfalah for due diligence process
Pakistan’s central bank has recently reduced its policy rate by a cumulative
250 basis points from a record 22 percent, and inflation has decreased from 38
percent in May 2023 to 11 percent in July. These measures have positively
impacted the equity markets, with the benchmark KSE-100 Index rising 71 percent
in dollar terms over the past year, making it the best-performing stock market
globally.
"Foreign funds are beginning to re-enter the market, providing
much-needed support," Bajwa added.
Source: Arab News