RBS sells off Pakistani arm in £34m deal

City A.M. Reporter
ROYAL Bank of Scotland yesterday said that Faysal Bank is to acquire 99.37 per cent of RBS Pakistan for 4.298bn rupees (£34m).

Pakistan lender Faysal Bank, which is 68 per cent owned by Bahrain-based Ithmaar, beat Egyptian Bank EFG-Hermes in the race to snap up the lender.

Pakistan’s central bank said in March it had allowed Faysal Bank and EFG-Hermes to conduct due diligence on RBS’s Pakistani operations, which include conventional and Islamic banking.

RBS said the transaction was subject to the approval of Pakistan’s central bank and is expected to be completed in the third quarter of 2010.

The Pakistani lender has 75 branches in 24 cities and was acquired by the Scottish bank as part of its disastrous purchase of Dutch lender ABN Amro in 2007.

The planned sale of RBS Pakistan is part of a move by British government-controlled RBS to sell assets globally as it tries to exit from up to 16 countries and focus on core domestic businesses.

MCB Bank said in January its bid for RBS’s Pakistan operations had lapsed because it failed to get regulatory approval.

MCB Bank had agreed in August to buy 99.37 per cent of RBS Pakistan for about £59m.

Earlier this week RBS announced it had agreed the sale of its Argentinean business to Banco Comafi. That move followed the agreed sale of the RBS Colombia business to Scotiabank.