IFC injects Rs 6.6 billion equity into Bank Alfalah

The International Finance Corporation (IFC) has made an equity investment of Rs 6.66 billion in Bank Alfalah Limited. Earlier this year, the IFC, a member of the World Bank Group, evinced interest in investing in Bank Alfalah Limited (BAFL) and in May 2014 it successfully achieved a no objection certificate (NoC) from the State Bank of Pakistan (SBP) to carry out evaluation of the bank before its plan of equity injection in the banking company.
Finally, in September this year both entities signed an agreement on the IFC''s proposed $67 million investment in Bank Alfalah by subscribing 15 percent equity investment in the bank to help it to increase access to finance in Pakistan. According to information sent by the BAFL to Karachi Stock Exchange (KSE) here Tuesday, the bank has received a subscription amount of some Rs 6.66 billion in respect of the IFC''s equity investment.
"The bank will inform later, in due course, regarding issuance/credit of the shares into the IFC''s CDC account in lieu of aforesaid equity investment and increase in the paid-up capital of the bank. The auditors certificates regarding receipt of subscription money and increase in paid-up capital of the bank and payment of additional listing fee as per regulations of KSE will also be submitted later," it added.
The IFC already enjoys working relationship with BAFL and helped the bank in developing "Alfalah SME Toolkit," a free of charge online portal aimed to help SMEs through implementation of business practices based on information, communication and technology.
Bankers believed the new equity injection will enable BAFL to improve Capital Adequacy Ratio (CAR) cushion and the fresh equity is most likely to be used for expansion of global operations. It may be mentioned here that, IFC is the largest global development institution focused exclusively on the private sector. Working with private enterprises in about 100 countries, in FY14, it provided more than $22 billion in financing to improve lives in the developing countries and tackle the most urgent challenges of development.
While, Bank Alfalah began its operations in 1997 and has grown rapidly to become the sixth largest player in Pakistan''s financial services industry, the second largest Islamic Bank and the largest issuer and acquirer of credit cards in the country with a network of over 570 branches spanning 196 cities in Pakistan.