NIB Bank takes over PICIC

NIB Bank has formally taken over the Pakistan Industrial Credit and Investment Corporation (PICIC) by paying around 342 million dollars. Following the take-over, PICIC's new board of directors has been constituted on Thursday by appointing 10 new directors in the body.
Francis A. Rozario of Tamasek, Singapore, has been elected new chairman and Khwaja Iqbal Hassan from NIB Bank was appointed Managing Director, replacing Altaf Salem and M Ali Khuja respectively.
Tansoonan, Thomas Psodana, Mehmood Haq and Aamir Zahidi have also been elected new board members, while Basheer Jan Muhammad, Zahid Basheer, Anjum Saleem, Tariq Iqbal Khan, Frasat Ali, Jaweed Kalia and Perviaz Hassan Khan have retired from the board. The new Chairman, Managing Director and the new directors assumed their offices on Thursday.
Tamasek has 10 representatives in the board of directors of 14 members. NIB Bank has acquired 63.36 percent of the outstanding shares of the PICIC at Rs 78 per share. The total transaction size is thus valued at Rs 20.5 billion (342 million dollars).
NIB Bank has purchased 56 percent of the shares from certain shareholders, including National Investment Trust, Crescent Group and Basheer Jan Muhammad, while the remaining 7.36 percent from a tender offer to the general public.
The PICIC Board of Directors has been altered to reflect the majority ownership and control by the NIB Bank. Through the acquisition of the PICIC, the NIB has also gained control of the PICIC Commercial Bank, PICIC Asset Management Company, PICIC Insurance Ltd and PICIC Exchange Company, allowing the NIB to position itself as a dominant player in the financial sector of Pakistan, covering the fields of commercial, retail, consumer, corporate and investment banking, asset management and insurance.
This acquisition is the largest foreign currency generating transaction in Pakistan's banking sector after Habib Bank, as it will generate close to 250 million dollars inflow into Pakistan from Singapore. NIB is financing the acquisition through a combination of a rights issue of Rs 18.6 billion and a subordinated debt issue of rupees four billion.
Following the merger, the bank is expected to have total assets close to Rs 180 billion and total employees of over 4,400. NIB was established in October 2003 and has been one of the fastest growing banks in the country. It has recorded a growth in total assets of 543 percent to Rs 56 billion and a growth in deposits of 849 percent to Rs 35 billion, while the total number of employees has grown from 249 to over 2,000 in a short period of three-and-a-half years.
NIB is 72.7 percent owned by Temasek Holdings of Singapore. Temasek is the investment arm of the government of Singapore and is the largest shareholder of leading global brands such as Singapore Airlines, DBS Bank, Standard Chartered Bank, Port Singapore Authority, SingTel, Keppel Land, Capital Land, etc.
Temasek has a long-term investment horizon and this investment by its subsidiary, NIB, demonstrates its belief that Pakistan's financial sector and economy will continue to grow attractively in the future.