RBS sells Pakistan operations to MCB Bank

The Royal Bank of Scotland (RBS) has entered into an agreement with  MCB, Pakistan's largest privately-owned bank by assets, to sell its 99.37-per cent stake in RBS Pakistan for PRs7.2 billion ($87.4 million) a book value multiple of 0.73 times, to be funded from internal alance sheet resources.

The deal comes on the heels of RBS selling assets its stakes in Hong Kong, Indonesia, the Philippines, Singapore, Taiwan and Vietnam. Last week, Australia & New Zealand Banking Group Ltd. (ANZ) bought the bulk of RBS's Asian banking operations in these counteries for $550 million (See: ANZ acquires RBS's Asian assets for $550 million).

This leaves RBS's Indian, Chinese and Malaysian assets still on the sale block. Earlier in the day, MCB Bank said in a statement to the Karachi Stock Exchange that its board had approved a proposal to acquire the assets, but didn't give any details other than to say the deal is subject to the signing of a share-purchase agreement and approvals from the State Bank of Pakistan and other regulators.

Dutch bank ABN Amro, whose institutional and Asian assets RBS acquired in 2007, paid PKR13.8 billion or a four times price-to-book multiple for the bulk of the assets being sold to MCB in March 2007.

Besides MCB Bank, Habib Bank Ltd., Egypt's Orascom Telecom Holdings and local investment bank Jehangir Siddiqui Group had evinced interest in buying the assets earlier.

"There are non-price considerations for RBS to choose MCB over others. MCB is perceived as the one which has the ability to close the transaction efficiently. The fact that it has no funding issue and that the assets are a strategic fit are a plus," reported the Wall Street Journal, quoting Soofian Zuberi, Bank of America Merrill Lynch's head of global markets sales for Asia.