KARACHI: The HSBC Holding Plc is out hunting for a buyer of its Pakistan operations as the agreement between JS Bank Limited and HSBC Bank Middle East Limited (HBME) for the sale of HSBC – Pakistan to JS Bank has been terminated.
HBME, a wholly owned subsidiary of HSBC Holding Plc, Wednesday confirmed that it has terminated the agreement for the sale of HBME’s banking business in Pakistan to JS Bank Limited as regulatory approval has not been received.
HBME would now explore alternative options for its banking business in Pakistan.
The planned acquisition of HSBC – Pakistan operations has not been consummated because certain conditions precedent laid down in the Sale Purchase Agreement executed with HSBC Middle East Limited could not be fulfilled within the time period agreed between the parties, says a notice issued to stock exchange by JS Bank.
The sale purchase agreement between JS Bank and HBME was signed in September 2012, the deal was announced without actually having agreed upon a final price.
On June 30, 2012, the business to be sold had 10 branches and gross assets worth Rs60.06 billion (approximately $635 million).
The transaction was subject to the approval of the State Bank of Pakistan (SBP) and compliance with all other applicable laws, rules and regulations.
Since the deal with JS Bank has not materialized and HSBC would be exploring alternative options for its banking business in Pakistan, a number of local banks or financial groups might be interested in this acquisition, which might come cheaper as HSBC has already lost much of its deposit base.
To recall, initially MCB Bank, UBL Bank, KASB Finance, Silk Bank, Habib Bank Limited and Allied Bank were in queue as potential buyers of the foreign bank and sought central bank’s nod for initiating due diligence proceeds.