The Pakistan government, which has successfully concluded the sale of a 51 per cent stake in the erstwhile state-run UBL, expects good response in the GCC to the Habib Bank Ltd (HBL) privatisation drive, especially from UAE investors.
Last September, an Abu Dhabi-based consortium bought a majority stake in UBL for Rs12.35 billion ($208 million).
HBL is the second largest government-run commercial bank in Pakistan and is now set to sell off a controlling stake in it as part of the privatisation drive pursued by the Privatisation Commission of Pakistan.
"HBL is fully prepared for the privatisation process with a clean balance sheet and a lean workforce," said Zakir Mah-mood, president and CEO of the bank.
The bank, which had one of the highest non-performing assets (NPAs) at 50 per cent five years ago, has brought it down to 28 per cent of the current assets.
"Our NPAs are substantially down at manageable levels and are fully provided for. While 62 per cent of the NPAs have been provided with cash provisions, the balance is covered at the distress sale value of collateral," he said.
The Privatisation Commission had invited Expressions of Interest from strategic investors interested in acquiring a minimum stake of 26 per cent of the government's shareholding in HBL.
The process is expected to be completed by the middle of this year. The terms of sale include the transfer of management control.
Preparing for the privatisation, HBL's management is currently carrying out an extensive streamlining and restructuring programme.
The bank has successfully brought down the staff strength by more than 30 per cent from 32,000 to 19,000 during the past few months.
The bank has a full service licence covering commercial, retail banking, consumer and investment banking activities in Pakistan and most of the other countries where it is present.
The extensive domestic network consists of 1,468 branches with an about 20 per cent market share. HBL's large international network includes 48 branches in 25 countries including the 8 branches in the UAE and the rest spread across Europe, the Middle East, Far East, Asia, Africa and the U.S.
The bank also operates three wholly owned subsidiaries - Habib Bank Financial Services (Pvt) Ltd., Karachi, Habib Finance International Ltd., Hong Kong, and Habib Finance Australia Ltd. - Sydney and joint ventures Habib Nigeria Bank Ltd. (40 per cent ) and Himalayan Bank Ltd. (20 per cent).
Gulf News 2003
