Pakistan Govt Puts SME Bank Up For Sale

The Privatization Commission (PC) invited expressions of interest (EoIs) for dispossession of 93.88 per cent government shareholding in Small and Medium Enterprises (SME) Bank Limited along with management control.

SME Bank is a public sector organization. The bank was incorporated  in Pakistan on October 30, 2001. Soon after, the company was issued a Banking License on September 13, 2004 to start its banking business in Pakistan.

It currently employs around 377 permanent and contract-bound individuals and runs 13 branches countrywide presently.

The bank holds 73.1496 equity stakes in SME Leasing Limited, which is a publicly listed entity on Pakistan Stock Exchange (PSX) as well. It was incorporated as a wholly owned entity of SME Bank in July 2002.

According to Privatization Commission’s explanation, the timely accommodation of EoIs would allow investors more time for the accommodation of statements of qualifications (SoQs). The last date to get SoQs is March 17, 2017. PC has welcomed Eol’s from neighboring countries as well as worldwide financial specialists who want to buy a stake in the bank.

The government states that,

The Government of Pakistan, acting through the PC, intends to proceed with the privatization of SME Bank, through divestment of up to 93.88% in the share capital of SME Bank along with transfer of management control to a qualified strategic investor

SBP To Issue New Banking License Type

SBP will issue a new banking license of a particular type –  with no less than 60 percent advances for SME segment with a Minimum Capital Requirement (MCR) of PKR 6 billion. PKR 2 billion would be required to be injected straight away while PKR 1 billion would have to be paid every year for the next four years, said PC.

Can Be Used As A Digital Banking Platform

Service related issues of representatives will keep on being administered by the current terms of service. The PC said the SME Bank can be utilized as a platform for conveying branch-less Digital Finance/ banking services as per requirements of the SBP.

PC has selected a Financial Advisory Consortium which includes:

  • Elixir Securities Pakistan (Private) Limited
  • Bridge Factor (Private) Limited (Lead Financial Advisers)
  • KPMG (Financial/Tax Advisor)
  • and MTC (Legal Counsel)

This consortium will be handling the transaction.

Source: DailyTimes