The Netherlands-based international banking group ABN Amro is to acquire a 93.4% interest in Pakistan's Prime Bank for a cash consideration of PKR13.8 billion, or PKR54 per share. The banking giant has commented that it also intends to launch an offer for the remaining shares.
According to ABN Amro, it is already the third largest foreign bank in Pakistan, and will become the second largest as a result of the increased scale that this acquisition will provide. The company added that it would also become one of the top 10 banks in Pakistan, with assets of PKR124 billion (E1547 million) and over 80 branches.
In a press release, ABM Amro commented that Prime Bank fits the group’s mid-market strategy as over 50% of Prime Bank’s current loan portfolio is placed with small-to-medium enterprises (SMEs), which will enable ABN Amro to build critical mass and diversify its risk portfolio in the high-growth SME business banking market in Pakistan.
ABN Amro also commented that Prime Bank’s network of 69 branches in 25 of Pakistan’s major cities would enable the group to access the under-penetrated, fast-growing client base in the region.
Pakistan has one of the world’s fastest growing financial markets and is a key growth market for ABN Amro in Asia, said Jeroen Drost, CEO of ABN Amro, Asia. This transaction presents tremendous opportunities to accelerate our activities in the Pakistan market as we bring together our global expertise and resources with Prime Bank’s local client base and extensive distribution network.
According to ABN Amro, the offer is expected to commence on March 9, 2007 and to close on or about March 30, 2007.