Pakistan operations: HBL shows interest in acquiring Barclays Bank

Friday, October 10th, 2014 9:52:28 by



KARACHI: 

Habib Bank (HBL) is considering entering into negotiations for the acquisition of Barclays Bank’s Pakistan operations, according to a notice sent to the Karachi Stock Exchange (KSE) on Thursday.

HBL intends to commence in due course a due diligence exercise, subject to the approval of the State Bank of Pakistan (SBP), it added.

The proposed acquisition will materialise only after the due diligence exercise, execution of definitive agreements between the parties involved and receipt of all relevant regulatory approvals.

Barclays Bank is following in the footsteps of HSBC Bank Middle East, which is going to sell its Pakistan operations to Meezan Bank. With an asset base of over Rs1.7 trillion, Habib Bank is the largest Pakistani commercial bank in terms of both pre-tax profitability and total assets.

Its pre-tax profit for the six-month period ending on June 30 was Rs22.1 billion, up a massive 39.5% from the comparable period of the preceding year. Habib Bank’s gross profitability was 22% greater than its closest rival whose pre-tax profits clocked up at Rs18 billion for the same period.

With total assets amounting to Rs49.9 billion, Barclays Pakistan was the 28th largest bank operating in the country at the end of the first six months of 2014. Its pre-tax profit for January-June was Rs411.7 million, 67.4% up from the comparable six-month period of the preceding year.

Habib Bank operated 1,546 branches while Barclays Bank ran seven branches at the end of 2013.

HBL employed a little less than 13,000 people at the end of 2013 while the number of employees at Barclays Bank Pakistan was only 247.

However, the cost per staff member at Barclays Bank was significantly higher than the cost per employee at Habib Bank. While Habib Bank incurred a cost per staff member of Rs1.38 million in 2013, Barclays Bank’s average remained Rs2.76 million over the same year.

Published in The Express Tribune, October 10th, 2014.

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Karachi News Sources -2

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