Union Bank approves share swap ratio

The board of directors of Union Bank Limited has approved swap ratio of shares in the wake of amalgamation of the bank with Standard Chartered Bank.

The Union Bank has informed the regulators “the board of directors of Union Bank Limited in their meeting held on September 22, 2006 approved the draft scheme (of amalgamation).”

“In terms of the draft scheme, shares of Union Bank will be swapped in the ratio of 2.5:1 that is 2.5 shares of face value of Rs10 each in Standard Chartered Bank (Pakistan) will be issued for each one share of Union Bank having face value of Rs10.”

Modarabas, Islamic banks coordinated working sought

Newly elected chairman of Modaraba Association of Pakistan, Bashir A Chowdry said on Thursday that State Bank of Pakistan has constituted a joint task force to “promote coordinated functioning of Modarabas and Islamic Banks for which MAP will try to contribute effectively.”

Addressing the Annual General Meeting of Modaraba Association of Pakistan (MAP) the newly elected chairman said modaraba sector has potential and capabilities but needs diversification within admissible modes of business.

He urged for further research and multiple products instead of relying on a single product or service.

Foreigners hover near fast-growth local banks

Foreign banks are beating a path to Pakistan’s financial sector, attracted by reforms that have laid the platform for rapid growth and rising incomes.

Asia-focused Standard Chartered earlier this month completed the $487 million purchase of a 95.37 per cent stake in Union Bank Ltd – the biggest buy yet by a foreign bank in Pakistan.

Singapore’s Temasek Holdings, Dutch ABN Amro and HSBC are among other foreigners eyeing possibilities in Pakistan, according to bankers here.

Khawaja Iqbal Hassan, President and Chief Executive of NIB Bank (NDLC-IFIC Bank) – majority owned by Temasek – confirmed his intention to acquire a bank, but did not give specific details.

Pakistan to start new options in securities

The federal government intends to start three new options ie call, switch and swap in its securities.

Sources of banking industry said that by starting these three new options in both federal as well as provincial securities, institutional investors, both local and foreign, will be lured to make investment.

India by changing its Security Act of forties, 4 years ago had created depth and widened investment scope in its union securities.

The initiative of Indian government also led to investment in union securities by overseas Indians.

SBP creates 4-tier administrative system

The State Bank of Pakistan on Thursday announced creation of new four-tier administrative system.

The new administrative system of the central bank will create financial markets and reserve management cluster under which there will be a banking finance group, which will focus on high priority credit sectors such as infrastructure financing, housing finance, Islamic banking, SME and microfinance.

Governor SBP for the last few months has been trying hard to start infrastructure financing in the country and in this regard it is expected that state-controlled Industrial Development Bank (IDBP), by turning it into new banking entity, will be sole financial institution for infrastructure financing in the country.

Mutual funds can invest abroad

In what is being seen as a landmark decision, the State Bank has allowed mutual funds operating in Pakistan to invest abroad. But initially the central bank has placed a cap of $15 million on such investment by a single mutual fund at a given time, says a circular issued by the Exchange Policy Department of the SBP on Saturday.

“This is a landmark decision,” says Mr. Jahangir Siddiqui who pioneered the open-ended mutual fund in Pakistan. “It is going to discourage capital flight from Pakistan and enable investors to diversify their portfolios geographically for the first time in the country.”

Banks to join National Clearing House: margin financing system mechanics decided

A nine-member committee has been formed to smooth the transition from COT (Badla) to margin financing. Comprising four bankers and five brokers, the committee would have former governor of the State Bank of Pakistan and now President of Metropolitan Bank, Kasim Parekh, as its chairman. In a series of meetings held at the State Bank of Pakistan Head Office on Saturday, chaired by the Governor of State Bank of Pakistan and attended by Minister of State for Finance Omar Ayub Khan and Chairman of Securities and Exchange Commission of Pakistan (SECP) Dr Tariq Hasan.

Banks to join National Clearing House: margin financing system mechanics decided

A nine-member committee has been formed to smooth the transition from COT (Badla) to margin financing. Comprising four bankers and five brokers, the committee would have former governor of the State Bank of Pakistan and now President of Metropolitan Bank, Kasim Parekh, as its chairman. In a series of meetings held at the State Bank of Pakistan Head Office on Saturday, chaired by the Governor of State Bank of Pakistan and attended by Minister of State for Finance Omar Ayub Khan and Chairman of Securities and Exchange Commission of Pakistan (SECP) Dr. Tariq Hasan.

Assessment of liquidity in stock market: Shaukat summons adviser, SBP governor

Prime Minister Shaukat Aziz has summoned his Adviser on Finance Dr Salman Shah and State Bank Governor Dr Ishrat Husain to assess the placement of liquidity in the stock market for phasing out of COT (badla) with margin financing. At present, Salman and Ishrat are in the US to attend International Monetary Fund and World Bank spring meetings. They are scheduled to return on April 25. Now they would report in Islamabad directly.