Temasek unit to buy Pakistan's PICIC

KARACHI, Dec 6: NIB Bank Ltd, a subsidiary of Singapore's state investment agency Temasek [TEM.UL], said on Wednesday it would buy a majority stake in Pakistan Industrial Credit Investment Corp (PICIC).

An industry source familiar with the deal said NIB Bank would pay around $300 million for the stake in PICIC, which focuses on financing industrial development projects in Pakistan.

NIB Bank is one of several foreign banks eyeing investment opportunities in Pakistan, attracted by reforms that have laid the platform for rapid growth and rising incomes. Others include Barclays Plc. , ABN AMRO and HSBC , according to bankers.

NIB Bank will pay 82 rupees per share for the PICIC stake -- a 9 percent premium to PICIC's Tuesday close -- but the source did not say precisely how much it would acquire.

''NIB Bank has agreed to buy a majority stake in PICIC at approximately $300 million,'' said the source. ''The acquisition will be done though NIB Bank and not directly by Temasek.'' Analysts said, at that price, the lender would be able to acquire more than 50 percent of PICIC which, according to its Web site, was set up in 1957 with World Bank help.

PICIC shares rose 1.3 percent to 76.25 rupees by 0619 GMT.

In a notice to the Karachi Stock Exchange <.kse>, NIB Bank confirmed the intended purchase, but gave no price.

In a separate statement, PICIC said it was selling a majority of its shares, but did not identify the probable buyer.

PICIC had total assets of 40.5 billion rupees ($664.9 million) at the end of 2005, according to its Web site. It claims its commercial banking arm is Pakistan's sixth-largest bank, with 129 branches by the end of this year.

Major banking reforms pushed through by Prime Minister Shaukat Aziz, the finance minister whom President Pervez Musharraf poached from Citibank and then promoted to premier, have helped the economy's rehabilitation.

Banks' profits grew 87 percent in 2005 and are expected to grow at about 44 percent this year, according to analysts.

Last July, Temasek tripled its stake in Pakistan's small commercial NIB Bank (NDLC-IFIC Bank) to 72.6 percent, which was then worth about $57 million.

Temasek is also the biggest shareholder in Standard Chartered Plc. which, in August, agreed to buy Pakistan's Union Bank Ltd. for $511 million.

($1=60.91 Pakistani Rupee)

REUTERS