Due diligence: HBL, BAFL granted NOC for Citi Bank consumers …

Due diligence: HBL, BAFL granted NOC for Citi Bank consumers division

By Muhammad Yasir

KARACHI: The State Bank of Pakistan (SBP) has granted due diligence permission to Habib Bank Limited and Bank Alflaha Limited (BAFL) for the acquisition of Citi Bank consumers’ portfolio comprising credit card business, auto financing and personal loans.

The two banks – HBL and BAFL – will evaluate the consumer business of the Citi Bank, which it planned to sell out for in pursuance of its divestment plans, SBP’s spokesman Syed Waseemuddin told Daily Times on Wednesday.

Citi Bank sought permission from SBP a couple of weeks ago to provide due diligence Non-Objection Certificate (NOC) to the interested banks – BAFL and HBL for its consumer financing division, which it planed to sell out.

As soon as the process of the due diligence is completed by the banks, the will offer a price to Citi Bank to be set on negation between the party. Afterwards, the acquisition of the consumers’ portfolio will be carried out after approval of banking regulatory and one of two banks will buy the consumers division Ciiti Bank.

HBL and BAFL were also interested to get due diligence permission of HSBC however, they were not granted by the banking regulator.

Citi has entered its sixth decade of continuous presence in Pakistan to serve its corporate clients and retail customers in the country. The bank’s consumers division is possessing a handsome number of customers who mostly belong to elite and upper middle class of the society having good inclination to avail banking services come under consumer financing portfolio such as credit cards, car financing and etc.

The bank offers a full array of corporate and investment banking services to public sector entities, local corporates, multinationals and financial institutions.

It is surprising news in the banking industry because Citi Bank had been given credit without an iota of doubt to play a leading role in revolutionising consumer banking in Pakistan.

It has been the bank providing key bankers to local markets including famous names – Shaukat Tareen, now adviser to chairman Silk Bank and Tameer Microfinance Bank CEO Nadeem Hussain.

The American bank is operating merely with 11 branches in Pakistan but it has been very successful in developing the consumer banking market having strong presence in the corporate and investment banking space, particularly among clients looking to execute cross-border deals.

Citibank has been scaling back its global branch network for the past five years after global meltdown hits its retail banking and investment operations.

It carried out lay-offs and restructured its operations in many countries including Pakistan. In 2011, it had sealed a deal to sell out its partial division of consumers financing portfolio, that is, housing finance, to BankIslami in early 2011, against the worth of Rs 953 million.

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