Sumary of HBL in talks to acquire Silkbank’s consumer portfolio:
- Silkbank has initiated negotiations for a deal with Habib Bank Ltd (HBL), the country largest commercial bank, to sell its consumer portfolio, disclosed a notice sent to the Pakistan Stock Exchange (PSX) on Thursday..
- HBL has approached Silkbank with a request for its concurrence to it for applying to the State Bank of Pakistan for permission to proceed with due diligence of its consumer portfolio — credit cards, personal installment loans and running finance, the exchange was informed by the company secretary through the notice..
- Silkbank company secretary Faizul Hasan Hashmi told Dawn by telephone from Karachi that the bank was trying to raise funds for improving its current Capital Adequacy Ratio (CAR), also known as capital to risk-weighted assets ratio..
- It is a measure of how much capital a bank has available, reported as a percentage of a bank risk-weighted credit exposures..
- At present, according to Silkbank nine-month unaudited accounts for the period covering January-September 2020, the bank CAR eroded significantly in nine months from 5.81pc at the end of 2019 to 4.16pc at the end of September 2020..
- Mr Hashmi said the Covid-19 pandemic had made it extremely difficult for the bank to recover its bad loans, which meant it needed to look for other sources to inject capital into the company..
- Silkbank had a strong consumer asset base of Rs18.4bn in personal loans, credit cards and running loans at the end of September…