New banking company on the cards

KARACHI (October 25 2002) : A new banking company would be formed following amalgamation with Crescent Investment Bank Limited, Pakistan Operations of Mashreq Bank and International Housing Finance Limited.

Crescent Investment Bank and International Housing Finance Limited signed an agreement with Mashreq Bank, a banking company incorporated under the laws of the United Arab Emirates.

In terms of the agreement, Mashreq Bank has decided, subject to approval of State Bank of Pakistan and other regulatory authorities, to amalgamate its Pakistani branches with a locally incorporated company under the laws of Pakistan with the object(s) of carrying on banking business.

In terms of this agreement Mashreq desires to induct CIBL and IHFL as joint venture partners by amalgamation with the locally incorporated banking company, subject to terms and conditions in the agreement and necessary regulatory agreements.

The JCR-VIS Credit Rating Company (JCR-VIS) has placed the 'A/A-1' entity ratings of Mashreq Bank psc-Pakistan branches and the 'BBB/A-3' entity ratings and A bank finance rating of International Housing Finance Limited (IHFL) on the Rating Watch.

This action has been taken following the signing of the Memorandum of Understanding by the respective institutions to approach the SBP and other regulatory authorities for permission to amalgamate Mashreq Bank, IHFL and an investment bank.

As stated above, the merger would be subject to the approval of the scheme by all relevant regulatory authorities.

JCR-VIS would review the assigned ratings following the completion of the merger process.

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