Bank Alfalah Limited and International Finance Corporation (IFC) announced on Friday that both the parties had signed definitive agreements for IFC’s proposed investment in Bank Alfalah.
According to the key agreed terms, the IFC will acquire a strategic equity stake in Bank Alfalah up to 20 per cent. The IFC will initially invest up to US$ 67 million in Bank Alfalah to subscribe to 15 per cent equity stake. The transaction is expected to close after obtaining final regulatory approvals before the end of the year.
The agreements were signed at a ceremony in Abu Dhabi which were attended by His Highness Sheikh Nahayan Bin Mubarak Al Nahayan and Bank Alfalah Chairman, His Highness Sheikh Hamdan Bin Mubarak Al Nahayan along with Bank Alfalah President & CEO Atif Aslam Bajwa, members of Bank Alfalah Board of Directors, senior executives of both institutions and notables of the UAE.
“We are delighted to have IFC as a shareholder and partner,” said Atif Bajwa, CEO Bank Alfalah. “We look forward to developing a long-term strategic collaboration which will strengthen the Bank’s ability to provide a wider range of services and better access to finance, and create opportunities for economic growth in the country. This new foreign investment will also contribute significantly to attracting more investors to Pakistan”.
Providing easy access to financial services has been a strong point for Pakistan’s fifth largest private bank. Bank Alfalah has been a front runner in developing effective financial solutions for the country’s SME segment and has partnered with IFC previously to develop a comprehensive advisory package to implement its SME banking model.
The investment fits with IFC’s strategy to expand access to credit and help boost intra-regional investment. The IFC support is also expected to help enhance investor confidence in Pakistan’s banking sector.
“A strong financial sector is the backbone of any economy,” said Dimitris Tsitsiragos, IFC Vice President for Global Client Services. “This investment will help support Pakistan’s financial sector and demonstrate its long-term potential. It will also give smaller business access to capital allowing them to unlock their potential and create much-needed jobs”.
Pakistan is a priority country for the IFC. During the last three years, the IFC has ramped up its investments and advisory services work supporting the development of Pakistan’s private sector. The IFC focused on mobilising investments in power and infrastructure, and providing access to finance for micro, small, and medium enterprises through financial intermediaries.