KARACHI:
Habib Bank Limited (HBL) has announced an intention to up its stake in Bank PHB, Nigeria and New Jubilee Insurance Company in its annual general meeting held this week.
The country’s largest private bank will acquire a further 24 per cent shareholding in Bank PHB, Nigeria in order to increase its share to 30 per cent from six per cent, according to a communiqué sent to the Karachi Stock Exchange on Thursday.
The value of the current six per cent stake in the Nigerian bank plummeted 76 per cent to Rs673 million in 2010 from Rs2.76 billion in 2008.
The Central Bank of Nigeria had carried out a special investigation into the books and affairs of Bank PHB, Nigeria two years ago and identified huge provision requirements for loan losses and removed the chief executive officer and executive directors of the bank. As a result of these actions, market value of PHB shares significantly declined at the Nigerian Stock Exchange.
Bank PHB was one of nine banks bailed out in a $4 billion rescue by the Nigerian central bank in 2009 after auditors found they were so weakly capitalised that they posed a systemic risk to sub-Saharan Africa’s second biggest economy.
The Nigerian bank issued right shares recently and Habib Bank being a shareholder was offered a stake, said BMA Capital analyst Abdul Shakoor. It seems they have accepted the offer to buy a further stake, the analyst added.
It is not new for Habib Bank to acquire stakes in foreign banks as it has shareholdings in Diamond Trust Bank Limited (Kenya), Himalayan Bank Limited (Nepal) and Kyrgyz Investment and Credit Bank mainly because of its parent company Aga Khan Fund for Economic Development’s holdings in it.
The bank had also established Habib Bank of Nigeria Limited with a 40 per cent stake in 1981.
Insurance company holding rises
Habib Bank will also increase its shareholding in New Jubilee Insurance Company to 24.5 per cent from the current 10 per cent. The value of the current stake in the insurance company dropped to Rs515 million in 2010 from the preceding year’s Rs753 million. Both the investments are subject to regulatory approvals from the State Bank of Pakistan, the KSE notice informed.
Published in The Express Tribune, April 1st, 2011.
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