Muslim Commercial Bank (MCB) has been granted an in-principle conditional approval from the State Bank of Pakistan (SBP) for conducting due diligence of Telenor Microfinance Bank.
According to the stock filing, the bank has been keen to acquire stakes of 55 percent in Telenor Microfinance Bank since its majority stakeholder, Telenor Pakistan, announced the proposed divestment in Telenor Microfinance Bank in November 2021.
So far, three banks have expressed the intention to acquire a 55 percent shareholding of Telenor Pakistan in Telenor Microfinance Bank, including United Bank Limited and Askari Bank Limited. The increasing interest of the commercial banks in one of the leading microfinance banks will get the investors a handsome price of stakes against the divestment.
The 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 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 percent share of Telenor Microfinance Bank.
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.
As far as MCB Bank is concerned, the bank has maintained an expansion approach to scale up its operations. It not only acquired and merged the operations of NIB Bank in 2016, but it also set up a subsidiary of a specialized banking unit, MCB Islamic Bank. The commercial bank also expressed its intention to acquire SME Bank but the plan was revoked later on
