Citi Bank has sought permission from State Bank of Pakistan to provide due diligence to one of the two banks—Bank Al-falah Limited (BAFL) and Habib Bank Limited (HBL) for its consumer financing division, which it planed to sell out.
The bank’s management has been in talks and carried out several non-disclosure meetings with key officials of BAFL and HBL and other banks in the past few weeks but dialogues with two banks were reportedly progressive in accordance with the offer of Citi Bank.
Citi Bank’s consumers division is possessing handsome number customers who are 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 American bank is operating merely with 11 branches in Pakistan but it has been very successful strategy 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 cutting 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.
The situation has been settled at formal stage when Citi Bank approached central bank to provide due diligence permission to one of the two banks or separately, which means the two banks have handsome offers in their pockets for Citi Bank in order to acquire its consumer finance division.
It has been the bank provided key bankers to local markets including famous names—Shaukat Tareen, now advisor to Chairman Silk Bank and Nadeem Hussain, CEO Tameer Microfinance Bank.
BAFL or HBL, who will become winner to seal the deal? Well, we have to wait and watch.
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