MCB, KASB show interest in HSBC acquisition

MCB Bank and KASB have shown interest in acquiring HSBC stakes in Pakistan as HSBC, one of the largest banking and financial service organisations in the world, has decided to wind up its operations in the country. Sources in banking sector told Business Recorder on Thursday that under the restructuring plan Hong Kong and Shanghai Banking Corporation (HSBC) is examining the potential sale of businesses in Pakistan.
In this regard HSBC has officially informed the State Bank Pakistan that it has plans to sell its stakes in the Pakistani financial market, they added. HSBC is working in Pakistan for last 30 years. It started financial operations in 1982 and since then has expanded to all major cities of Pakistan and operated as a full service bank.
HSBC Pakistan has earned a profit after tax of Rs 971 million during CY11 as compared to Rs 491.59 million in CY10. Its net assets surged from Rs 6.199 billion in CY10 to Rs 7.505 billion CY11. For last few weeks there were reports that HSBC plans to scale back or even exit certain Asian countries including Pakistan to concentrate on core areas. However the bank dismissed such reports. Now with the formal request to the regulator, it has confirmed that HSBC is taking back its stakes from Pakistan.
On the other hand, according to sources, three Pakistani banks are willing to acquire HSBC stakes and out of these three, two banks have applied for due diligence of HSBC. "MCB Bank, United Bank Limited and KASB are willing to buy HSBC stakes, however so far MCB Bank and KASB have been confirmed as interested parties as both have applied for No Objection Certificate (NOC) from the SBP to conduct the due diligence," they said. So far, the SBP is scrutinising the applications and not a single party has been allowed to conduct due diligence for HSBC.
Two years ago a deal between MCB and Royal Bank of Scotland got lapsed as the regulator, despite granting due diligence NOC, not allowed MCB Bank to acquire RBS shares after a dispute on sponsors shares. The case is still pending in the Lahore High Court, sources added.
The NOC for due diligence means not the final approval for acquisition of shares. After the deal, the acquiring party is again required to obtain a formal acquisition approval from the regulator. HSBC currently has 11 offices, 24/7 telephone call centre and ''HSBC Premier'' in Pakistan. The bank also offers Non-Resident Pakistani services. Out of its branches, four are located in Karachi, two each in Lahore and Islamabad, and one each in Rawalpindi, Faisalabad, and Sialkot. HSBC''s offices in Pakistan are operated by The Hong Kong and Shanghai Banking Corporation. In 2008, The Hong Kong and Shanghai Banking Corporation sold Pakistan banking business to HSBC Bank Middle East Limited.