Asset Investment Bank has entered into an amalgamation agreement with an institution which would help the bank to meet the capital requirement ceiling set by the Securities and Exchange Commission of Pakistan (SECP). According to an information received from the bank, the company has entered into an agreement with a reputed institution for amalgamation of the company with Asset Investment Bank Ltd.
By conversion of major liabilities into equity and completion of amalgamation plan, the bank would attain the minimum equity level set by SECP and start its normal operations.
After the completion of amalgamation, nearly 80 percent of the company's interest-bearing liabilities would be transferred into equity to help achieving the minimum capital requirements of Rs 300 million set by NBFCs Rules 2003. After the completion of above mentioned liabilities into equity by issuance of right shares and the amalgamation, the company would be in a position to restart its normal functions and mobilise substantial funds to generate income through safe placements/investments.
The annual report of the bank said that in the year ended June 30, 2004, it had registered a loss of Rs 18.073 million.
The main reasons of operational losses were large accumulation of non-earning assets in the shape of non-performing loans and non-remunerative investments.