Islamabad, Pakistan, 26 February 2004 — The Privatisation Commission today formally granted the Aga Khan Fund for Economic Development (AKFED) rights to 51% of the shareholding in Habib Bank Limited against a committed investment of Pakistani Rupees 22.409 billion (US$389 million) in accordance with all statutory requirements and the terms of the successful bid as approved by the Cabinet Committee on Privatisation.
“This sale represents a very important step towards enhancing potential in the financial services sector and towards reinvigorating investment by those with a solid and proven interest in growing this country’s economy,” said Finance Minister Shaukat Aziz on the occasion.
Underlining the importance of a transparent process, Dr. Abdul Hafeez Shaikh, Minister for Privatisation and Investment said that “privatisation of Habib Bank Limited (HBL) is a manifestation of the Government policy that underscores privatisation in a fair and transparent manner for the people of Pakistan in the right way, to the right people, at the right price. The HBL transaction also highlights the professionalization and integrity of the process which has been universally lauded and appreciated by all the bidders.”
“AKFED is committed to building on the strength of the premier financial institution in Pakistan and to extending its range of activities into new areas both in Pakistan and abroad,” said Iain Cheyne, Director of AKFED.
In accordance with the Commission’s instructions, AKFED has effected payment for 26% of the shares, with the remaining 25% being payable over two years. The existing senior management is expected to continue to work with directors newly appointed to the Bank’s board by the Government of Pakistan and by AKFED. AKFED will be represented by Sultan Allana, who will serve as the Chairman, Zakir Mahmood, who will continue as President and Chief Executive Officer, Barrister Sajid Zahid, senior partner at Orr Dignam & Company and Iain Cheyne. The Government designees are: Mr. Ahmad Waqar, Secretary, Privatization Commission; Mr. M. Ismail Qureshi, Additional Finance Secretary, Finance Division; Mr. Arif Mansur, Additional Finance Secretary, Finance Division; Mr. Shaukat Hayat Durrani, Additional Secretary, Prime Minister’s Secretariat.
Habib Bank Limited was incorporated in 1941 in Bombay and moved its headquarters to Karachi in 1947 becoming the first commercial bank to be established in Pakistan. A pioneer in the introduction of new products such as automated teller machines, and travellers cheques into the Pakistani market, the Bank today has more than 1,400 branches and is present in 25 countries across five continents. HBL is the largest commercial bank in Pakistan with a customer base of over 5 million customers with customer deposits exceeding Rs 349 billion (US$ 6.1 billion) and total assets of over Rs. 430 billion (US$ 7.6 billion).
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The Aga Khan Fund for Economic Development (AKFED) is a for-profit international development agency that seeks to create economic capacity and opportunity in specific regions of the developing world. Its financial service institutions, some of which date back nearly 70 years, include commercial banks, microfinance banks, insurance companies and property development and management companies in nine countries, some of which are listed on local stock exchanges. Active also in the fields of industry, tourism development, infrastructure, media and aviation in 19 countries across South and Central Asia and sub-Saharan Africa, AKFED operates as a network of affiliates with more than 90 separate project companies employing over 18,000 people and hitherto controlling assets in excess of US$1.5 billion. AKFED’s investments in Pakistan include the Serena group of hotels and lodges, New Jubilee Insurance Company and New Jubilee Life Insurance Company and The First MicroFinance Bank.
AKFED is a part of the Aga Khan Development Network is a group of private, non-denominational development agencies and institutions that seek to empower communities and individuals, often in disadvantaged circumstances, to improve living conditions and opportunities in specific regions of Africa and Asia. Active in over 30 countries, the Network's underlying impulse is the ethic of compassion for the vulnerable in society and its agencies and institutions work for the common good of all citizens, regardless of origin, gender or religion. The AKDN has an extensive range of activities in Pakistan in the fields of health, education, research, rural development, microfinance, infrastructural development and culture.