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Fauji Foundation to acquire Askari Bank’s 100pc shares
 
 
 


LAHORE - The Fauji Foundation will acquire 100 percent shareholding of the Askari Bank, currently operated by the Army Welfare Trust (AWT), as the Foundation has submitted its request to AWT in this regard, it is learnt.
The Trust has announced to approve the offer made by the Fauji Foundation to purchase up to 100 percent of AWT’s shareholding in Askari Bank Limited (AKBL), subject to obtaining of all regulatory approvals under the applicable laws and regulations. The exact number of shares to be purchased, the per-share purchase price and other terms and conditions of the proposed transaction will be finalized by the parties after obtaining regulatory approvals and completion of due diligence, stated Brig Tariq Sher (retd), Secretary AWT. He said that Army Welfare Trust and Fauji Foundation are in the process of making applications to the concerned regulatory bodies for grant of necessary approvals.
The proposed acquisition is subject to all regulatory approvals and compliance of all applicable laws and regulations, he said. He observed that an application has been made to the State Bank of Pakistan for its in-principle approval in order for the concerned parties to progress with the proposed acquisition. It is only after receipt of such approval that the terms of the proposed acquisition will be firmed up and finalize at which stage the extent of the applicability of all laws will be determined.
Experts said that the successful consummation of the proposed transaction will provide the platform for maintaining and strengthening the Banks competitive advantage to play a leading role in the sector and maximize value for its shareholders.
They said that Army Welfare Trust holds 50.57 percent shares in Askari Bank. They added that Askari Bank’s stock price fell Rs0.13 to close at Rs10.12 while Fauji Foundation shares also slumped during trade at the Karachi bourse, due to slump in stock market.
It is to be noted that Askari Bank Ltd (formerly Askari Commercial Bank) was incorporated in Pakistan on October 9, 1991, as a Public Limited Company. It is the only bank in the world run by an army; serving Adjutant General of Pakistan Army being head of the Board of Governors. It started its operations on April 1, 1992. The bank principally deals with banking, as defined in the Banking Companies Ordinance, 1962. The Bank is listed on the Karachi, Lahore & Islamabad Stock Exchanges.
Askari Bank has expanded into a network of 226 branches, including 31 dedicated Islamic banking branches, and a wholesale bank branch in Bahrain. A shared network of 4,173 online ATMs covering all major cities in Pakistan supports the delivery channels for customer service. Askari Bank achieved planned growth in business and operations during 2009. The total assets of the Bank amounted to Rs.254 billion as at December 31, 2009, registering an increase of 23 percent over December 31, 2008.Customer deposits reached Rs.206 billion by December 31, 2009, an increase of 23 percent over December 31, 2008.
Profit after taxation showed an increase of 187% at Rs.1.11 billion, when compared with last year’s Rs.386 million. The banking spread registered slight improvement over last year, despite absorbing the adverse impact on net mark-up income due to increased nonperforming advances. The Bank’s NPLs stood at Rs17.73 billion as of December 31, 2009 compared to Rs11.69 billion at the end of previous year, an increase of 52 percent.
The Fauji Foundation (FF), is one of the largest conglomerates in Pakistan, with interests in fertilizer, cement, food, power generation, gas exploration, LPG marketing and distribution, financial services, employment services, and security services. It is run by former officers of Pakistani Armed Forces. FF's shareholding in its associated companies has a market value of $661 million, while the companies represent 3.3 percent of the total market capitalization at the Karachi Stock Exchange.

 
 
on epaper page 17
 
 
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