UPDATE: MCB Bank To Buy RBS Operations In Pakistan For PKR7.2 Billion

MCB Bank Ltd. (MCB.KA) said Wednesday it has agreed to buy Royal Bank of Scotland Group PLC's (RBS) operations in Pakistan for PKR7.2 billion ($87 million).

MCB Bank will acquire 99.37% of the stake for PKR4.22 per share in cash and buy the remaining through a public tender, Kafeel Burney, a spokesman for MCB Bank, told Dow Jones Newswires.

The transaction will help MCB Bank to strengthen its operations in urban areas and broaden its product offering to retail and corporate customers, Chairman Mian Muhammad Mansha said in a statement to the Karachi Stock Exchange.

Muhammad Aurangzeb, chairman of RBS Pakistan, confirmed the deal and said his company's retail, commercial, Islamic and onshore businesses will be sold to MCB Bank.

The asset sale is a part of RBS's three- to five-year plan in unwinding its partial acquisition of ABN AMRO, which is widely seen as a strategic misstep.

Early this year, RBS, which is 70%-owned by the U.K. government, said it planned to sell its Asian retail-banking assets as part of a move to shed its non-core assets.

RBS currently operates 79 branches in Pakistan, including three Islamic banking branches. It has a loan book of PKR67 billion, deposits of PKR75 billion and assets of PKR108 billion.

MCB Bank had a loan book of PKR257 billion, deposits of PKR338 billion and assets of PKR458 billion at the end of the first quarter.

-By Haris Zamir, contributing to Jones Newswires; 91-11-43563354; [e-mail]