A final decision by MCB Bank’s management on the purchase of Telenor Microfinance Bank’s controlling shareholding is being finalized right now.
Telenor Microfinance Bank’s purchase by the bank is nearing completion, and an announcement will be made soon,” management informed analysts at a briefing.
According to the bank’s spokesperson, an official announcement that a contract with Telenor Group or the completion of the negotiating process is expected within the next two weeks.
A dividend payout ratio is expected to be maintained regardless of whether or not the purchase goes through.
In November of last year, MCB Bank had shown an interest in purchasing 55% of Telenor Microfinance Bank from its principal sponsor, Telenor Pakistan. The banking regulator granted the bank permission to conduct due diligence, which was recently completed.
Furthermore, the banking authority permitted United Bank Limited to do due diligence on MCB Bank, which was also interested in purchasing large holdings in the bank.
Telenor Microfinance Bank is currently a joint venture between Telenor and Ant Group.
More than one change of ownership has occurred in the bank’s history.
Tameer Microfinance Bank was founded in 2005. Easypaisa, the bank’s first mobile banking platform, was introduced in Pakistan in 2009.
As a pioneer in branchless banking, Telenor Bank has expanded its operations across the country with cutting-edge services. However, the microfinance bank’s financial performance has continued to deteriorate.
According to the balance sheet, the bank had assets of Rs. Fifty billion at the end of September 2021, but its losses remained unabated at Rs. 7.5 billion.
MCC Bank is the second-largest bank in terms of the number of locations. To increase the size of its activities, the bank stuck to a growth strategy. In addition to acquiring and merging NIB Bank’s activities in 2016, it established MCB Islamic Bank as a subsidiary of the specialized banking business. After initially expressing interest in purchasing SME Bank, the commercial bank eventually decided against it.
A big bank’s acquisition of a microfinance bank is expected to fix the microfinance industry. UBL and Habib Microfinance bank are both owned by Habib Bank Limited, with a significant stake in Khushhali Bank.