“ADG stands behind its investments in Pakistan one hundred per cent,” said the group’s Director, Ikram Sehgal.
He was speaking from the Sheikh Nahayan Palace in Abu Dhabi where a meeting between Bank Alfalah’s (BAFL) senior management and directors of ADG was held on Saturday.
Sehgal dispelled recent media reports that the group may sell its stake in BAFL, saying “all rumours about sale of the group’s holding in the bank are absolutely false.”
He admitted that recent resignations from the top management had warranted a change of strategies. “Obviously any time there is a change in the senior management, the situation has to be assessed closely,” he said referring to resignations of Bashir A Tahir and Pervez A Shahid.
Tahir had served as an adviser to the ADG chairman while Shahid had been working as head of strategic planning. “They were not directors, but employees of the group and their replacement will be announced shortly,” stressed Sehgal.
Alluding to a possible merger with Silkbank, Sehgal said “the group will further consolidate its position in Bank Alfalah soon.”
BAFL President Sirajuddin Aziz, who was also in Abu Dhabi at the time of the filing of this report, will address a press conference on Monday “to share Chairman Sheikh bin Al-Nahayan’s vision and the bank’s future investment strategy in Pakistan,” said an official release issued here on Saturday.
Recent media reports had hinted that the managements of Bank Alfalah was in talks with Silkbank to consider a merger between the two entities. “There is a possibility that the International Finance Corporation will increase its stake in the two entities in partnership with ADG,” asserted an analyst. He said that “once Silkbank is merged with BAFL, the management of the combined entity would be bestowed upon Shaukat Tarin.”
KASB banking analyst Hamza Marth said that “Silkbank appears to be the major beneficiary in this proposition, but in order for the deal to go through the swap ratio will have to be agreed upon.”
However, for now representatives of both banks have steered clear of commenting on the prospects of a merger. Refuting media reports of meetings between the managements of the two entities, President Silkbank Shaukat Tarin said, “as of now there has been no meeting,” adding that “to the best of my knowledge, ADG is not selling Bank Alfalah.”
However, when asked whether he would be asked to take the helm of affairs of a combined entity, Tarin declined to comment.
The Abu Dhabi Group is a significant stakeholder in Bank Alfalah. Silkbank is owned by a consortium comprising the International Finance Corporation, Bank Muscat, Nomura International and Sinthos Capital. The bank has sought mergers with other banks faced with meeting minimum capital adequacy requirements of the State Bank of Pakistan. A merger with Bank Alfalah would enable the institution to meet these regulations.
Published in The Express Tribune, January 9th, 2011.
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