Bank Asia signs MoU with Bank Alfalah to acquire its Bangladesh operations
Bank Asia has signed a memorandum of understanding
(MoU) with Bank Alfalah to acquire the latter’s operations in Bangladesh,
pending regulatory approvals and completion of legal procedures.
The agreement, signed on May 28, was disclosed
by Bank Asia in a filing to the Dhaka Stock Exchange on Thursday.
According to the disclosure, the proposed
acquisition requires approval from the Bangladesh Bank, the State Bank of
Pakistan, and other relevant authorities. It will also depend on the signing of
definitive agreements and compliance with all legal and procedural
requirements.
In a separate announcement to the Pakistan Stock
Exchange, Bank Alfalah confirmed that its board of directors has approved the
planned sale of its Bangladesh operations to Bank Asia.
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Once regulatory clearance is secured and final
agreements are executed, Bank Asia will proceed with the acquisition. Industry
estimates place the preliminary deal value at approximately Tk 600 crore.
In line with Bangladesh Bank’s merger and
acquisition guidelines, the acquiring bank must retain all employees of the
acquired institution for at least three years. Bank Asia has expressed its
intention to fully comply with this requirement.
Bank officials noted that the sale process began
in April 2024. While legal steps for the transfer of assets and liabilities are
still underway, technical aspects like core banking system integration also
remain in progress.
The audit and valuation of Bank Alfalah’s
local operations are being handled by PricewaterhouseCoopers (PwC) Bangladesh,
the local arm of the UK-based global consulting and audit firm.
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Founded in 1999, Bank Asia is recognized as a
pioneer in agent banking in Bangladesh. If finalized, this will be Bank Asia’s
third acquisition in its 26-year history.
In 2001, it became the first local bank to
acquire the Dhaka operations of the Canada-based Bank of Nova Scotia. It later
acquired the Bangladesh operations of Pakistan’s Muslim Commercial Bank Ltd.
Bank
Alfalah, incorporated in Pakistan and majority-owned by the Abu Dhabi Royal
Family through investment funds, launched its operations in Bangladesh in 2005.
It currently operates seven branches across the country.
Source: Daily Star