United Bank Limited (UBL) has also shown its interest in the acquisition of Telenor Microfinance Bank through the purchase of majority shares.
The leading commercial bank has been granted permission by the State Bank of Pakistan (SBP) for conducting an exercise of due diligence of Telenor Microfinance Bank for acquiring 55 percent sponsorship shares held by Telenor Group, according to a notification issued by Pakistan Stock Exchange.
UBL is currently working on the due diligence of two banks, including Samba Bank Limited and now Telenor Microfinance Bank, which depicted its aggressive approach towards the expansion of its business through the acquisition of shares in the said banks. However, the bank is also facing competition with different banks, including MCB Bank and Askari Bank, which are also planning to acquire shares of the same banks and are conducting due diligence exercises with the permission of the banking regulator.
The bank is apparently involved in another battle against peer banks besides a consistent struggle of high profitability and expansion of the network. However, UBL has already gained experience in the microfinance sector. It also owns 29.7 percent shareholding in the leading microfinance bank, Khushhali Microfinance Bank.
The bank has maintained exceptional profitability in the first three quarters of 2021 with a profit of Rs. 21 billion, showing a 41 percent increase from the last year. The bank operates 1,344 branches inside Pakistan, including 114 Islamic Banking branches and 2 branches in Export Processing Zones. It also operates 11 branches outside Pakistan.
Telenor Microfinance Bank was established in 2005 as Tameer Microfinance Bank. In 2009, the bank launched Pakistan’s first mobile banking platform Easypaisa, transforming digital payments in the country. Late in 2018, Ant Financial bought a 45% share of Telenor Microfinance Bank.
According to the balance sheet, the Telenor Microfinance bank maintained assets with the value of Rs. 50 billion but its losses continued unabated at Rs. 7.5 billion by the end of September 2021.
Telenor Microfinance Bank introduced branchless banking with the brand of Easypaisa and has expanded its business countrywide with innovative services, however, the financial performance of the microfinance bank has continued to slide.
