State Bank of Pakistan (SBP) has granted permission to Askari Bank and Sindh Bank to carry out due diligence of KASB Bank which would likely to be commenced shortly, KASB Bank issued an official statement. Askari Bank and Sindh Bank have been in talks with the management of KASB Bank showing interest to conduct due diligence which was allowed by the central bank on Tuesday.
These two banks are considered as mid-tier and emerging banks with moderate profitable operations; hence the central bank preferred them to conduct financial and technical assessment instead of large banks which have already expanded their operation countrywide. The due diligence of the bank caused possibilities of the merger of KASB Bank with any of the two banking companies; however more banks are likely to join race for showing their interest in the buyout of the bank.
KASB Bank has been imposed with a moratorium by SBP for the period of six months because of failure to meet its mandatory financial requirement, mainly the paidup capital. As the process of financial and technical evaluation is completed later on, any of the two banks will finally enter into negotiations based on price and transfer of assets. In the case of any deal settlement between the two banking companies, the central bank will review and give its final consent related to merger and acquisition.
Source: Daily Times
