The long-awaited privatisation of Pakistan’s largest bank, Habib Bank, is moving into its final stages and is on target to be completed by the end of the year. The bank, which has 1430 branches in Pakistan and the most extensive international network covering 25 countries, has undergone significant restructuring in recent years and attracted international and local interest.
Of the 19 initial expressions of interest, at least six institutions are understood to have pre-qualified and moved through to the next stage. The two key players are considered to be a consortium of the Qatar government and Qatar National Bank (QNB), and the Aga Khan Fund. Another interesting prospect is Emerging Market Partnership (USA), a fund run by former Pakistan prime minister Moeen Qureshi and former finance minister Shahid Javed Burki. Other interested parties are understood to be Pak Kuwait Investment Company, Central Insurance Company and Marna (Pvt). No large foreign banks, except QNB, have moved into the final stages. The qualification process is expected to be finished by end October and final bids are expected by December 8-9. Sources suggest the Privatisation Commission has a reserve price of around $400m for the sale of 51% of Habib, based on using the sale of competitor UBL as a benchmark.
Habib Bank, which has an 18% market share, has been transformed in recent years in the run up to privatisation. Bank president Zakir Mahmood said more than $1bn, half from the government and half from increased profitability, had been ploughed into restructuring programmes and building a viable technology platform.
The government is keen to sell this important bank to the highest qualified bidder and hopes to complete the deal by the end of 2003. It is also likely to seek to sell its remaining stake through a listing on the stock exchange.
