In a major development, JS Bank expressed its intention of acquiring BankIslami Pakistan Ltd. (BPL) with a controlling stake with over 51% shareholding as it seeks to expand its footprint in the financial industry.
According to the details, Next Capital, the appointed manager to the offer by JS Bank, sent a notice to the Pakistan Stock Exchange (PSX) revealing JS Bank’s decision to purchase 51% of shares in BankIslami which is Pakistan’s second-largest Sharia-compliant bank.
“On behalf of our client, JS Bank Limited, we, Next Capital Limited, hereby submit acquirer’s public announcement of Intention to acquire more than 51% shares and control of Banklslami Pakistan Limited,” said Next Capital in the notice.
Pertinent to mention that JS Bank already owns a 7.79pc shareholding in BankIslami. After receiving approval from the central bank, JS Bank acquired 86,316,954 ordinary shares, constituting 7.79% paid-up capital of BPL from Emirates NBD Bank PSJC on November 11, 2022. As a result, BankIslami achieved an operating profit before provision at Rs7.79bn, 194% higher than the same period last year.
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Moreover, BankIslami is already an associated company of JS Bank. Jahangir Siddiqui and Company Ltd, which is the parent entity of JS Bank, already owned a 21. 26pc stake in the Shariah-compliant bank at the end of December 2020.
On the other hand, the announcement of the intention to acquire voting shares and control of the bank is subject to obtaining the requisite regulatory approvals including clearance of fit and proper criteria from the State Bank of Pakistan (SBP). The parties are also yet to determine and agree upon the price of the majority share acquisition.
However, management control of the Shariah-compliant bank will enable JS Bank to kick-start its journey in Islamic banking, a division that is growing with every passing day and is eating away at the market share of conventional banking.
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