As per a notice issued at the Stock Exchange, Noor Financial Investment Company Kuwait (Noor) has decided to sell off its 49.11% stake in Meezan Bank Limited (MEBL) to Vision Financial Holding Limited at a value of US$190mn.This translates into a per share transaction price of Rs41.3 where MEBL’s market price today stands at Rs39.49 (last 1M performance of 4.6% vs 7.4% for the KSE-100).
The notice also mentions that Noor has executed final agreements while the transaction will be finalized in 2014, pending approvals of the official authorities and legal proceedings in Pakistan.
MEBL is Pakistan's first and largest Islamic Bank, focused on providing banking services to the growing segment of society that is looking to shift away from interest-based banking. The Bank benefits from being the first-mover in the Islamic Banking space, where MEBL has the largest branch network (number of branches as of September 2013 stood at 332 in 90 cities across Pakistan) and product range amongst domestic peers. The Bank’s focus on mobilizing and exploring new income avenues through attracting low cost deposits has been the key to its success. Currently, MEBL’s deposits make up 35% of total Islamic Bank deposits of the country and the bank holds 34% of industry’s total Islamic Banking assets.
To recall, MEBL reported 9M2013 earnings of Rs2.9bn (EPS: Rs2.87), up 8%YoY, mainly led by (1) higher net spread earned (Rs8.03bn, up 3%YoY), (2) reversal in provisions of Rs8.03mn compared to provisions of Rs511mn and (3) higher other income of Rs2.4bn, up 30%YoY. As of September 2013, MEBL trades at a PBV of 2.3x versus deal price to book value of 2.4x.
