The management of MCB Bank is in the process of finalizing its decision over the acquisition of majority shareholding in Telenor Microfinance Bank.
The bank is in the final stage of making a decision on the potential Telenor Microfinance Bank’s acquisition and the announcement in this regard will be made shortly,” the management told analysts in a briefing session.
According to an official, the bank has completed its due diligence on the microfinance bank and it will either enter into a deal with a sponsor, Telenor Group or it will end the negotiation process within the next two weeks.
The management indicated that it is likely that the bank will maintain a dividend payout ratio whether the acquisition goes through or not.
Last year in November, MCB Bank had expressed its interest to acquire 55 percent shares in Telenor Microfinance Bank from its main sponsor, Telenor Pakistan. The bank was granted permission for due diligence by the banking regulator which has been accomplished recently.
Besides MCB Bank, United Bank Limited also took an interest in acquiring major stakes in the bank and was allowed for due diligence by the banking regulator.
Telenor Microfinance Bank is jointly owned by Telenor Group and Ant Group at present.
The bank witnessed the transition of ownership more than once in the past.
The 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 45 percent share of Telenor Bank.
Introduced a branchless banking being as a pioneer with the brand of Easypaisa, Telenor Bank has expanded its businesses countrywide with innovative services however the financial performance of the microfinance bank continued to worsen.
According to the balance sheet, the bank maintained assets with the value of Rs. 50 billion but its losses continued to unabate at Rs. 7.5 billion by the end of September 2021.
MCB Bank is the second largest bank in terms of a network. The bank 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 the specialized banking unit, MCB Islamic Bank. The commercial bank also expressed its intention to acquire SME Bank but the plan was revoked later on.
The proposed acquisition of microfinance bank is likely to bring correction in the microfinance sector with the backing of a major bank. Khushhali Bank is backed by United Bank Limited and Habib Microfinance Bank is owned by Habib Bank Limited with major shareholding.
