Al Baraka Bank Pakistan, Burj to merge

Manama : Al Baraka Banking Group announced yesterday that its Pakistani unit, Al Baraka Bank (Pakistan) Ltd (ABPL), would merge with Burj Bank Ltd (BBL) of Pakistan to form a single Islamic Bank in Pakistan under the name Al Baraka Bank (Pakistan) Ltd. 

The merger, which is subject to regulatory approvals, would create an institution with assets totalling more than $1.1 billion. Al Baraka Islamic Bank-Bahrain will remain as a major shareholder. 

As per the deal, shareholders in Burj Bank would receive one Al Baraka Bank (Pakistan) share for every 1.7 shares in Burj, according to the statement issued. Shareholders of the two banks approved the merger during their EOGMs on August 18th and August 22nd respectively. 

Following the merger, all 74 BBL branches will be converted into ABPL branches and the combined network of the merged entity will become 224 branches in over 100 cities across Pakistan. The merger is expected to take effect from the last quarter of 2016. 

Commenting on the move, Adnan Ahmed Yousif, Chairman of Al Baraka Bank (Pakistan) Limited and President & Chief Executive of Al Baraka Banking Group (BSC Bahrain) said this step carries substantial benefits in terms of operating capability, expanded domestic coverage, and revenue generation which would eventually be passed on to the shareholders in the form of improved profit earnings and better gains in the form of share prices. The amalgamated entity would be in a position to offer varied financial products and services.

From his part, Shafqaat Ahmed, Board Member and Chief Executive Officer of Al Baraka Bank Pakistan Ltd said, “The completion of the merger will enable Al Baraka Bank (Pakistan) Ltd to make progress in the banking sector and cater to customer’s financial needs on a larger scale geographically. It is expected that two entities will operate as one Islamic Bank from last quarter of 2016”.

Currently, the largest shareholders in Burj Bank are Bahrain’s Bank Al Khair with a 37.9 per cent stake and the Jeddah-based Islamic Corporation for the Development of the Private Sector, which holds 33.9 percent.