ISLAMABAD — Major developments are taking place on the Pakistani financial scene in order to boost competition and put the banking sector on sound, competitive financial footings.

By far the most important development that has just taken place is the purchase of United Bank Ltd. (UBL) by the consortium of Abu Dhabi Group and Bestway Holdings Ltd. of UK (ADG-BHL). It will operate under chairmanship of Sheikh Nahyan Mubarak Al-Nahyan, who is also Education Minister of the United Arab Emirates. Another key development is establishment of a Western-style Financial Services Authority (FSA) — regulator of the banking and financial sector. What has created the strongest and highest waves in the financial market is Sheikh Nahyan Mubarak Al-Nahyan’s just concluded takeover of the UBL, Pakistan’s fourth largest bank.

The management control of the UBL has been transferred to Sheikh Al-Nahyan’s group by the government’s Privatization Commission (PC) by virtue of the consortium’s Rs.12.35 billion ($209 million) purchase of 51 percent shares of the bank. The government continues to retain the remaining 49 percent shares. But, over the next two years if the ADG-BHL consortium performs well, it will be a strong favorite to bid for these shares, too, at a competitive price which will be prevailing at that time.

Sheikh Nahyan Mubarak Al-Nahyan is upbeat over the UBL takeover. He sees investment in UBL as something beyond the bank’s mere purchase, reflecting, in fact, UAE and his plans to contribute to Pakistan’s economy. While signing the sale deed, he particularly applauded government of Pakistan "for their trust and confidence reposed in us," by selling the bank, over other bidders. "We will also like to avail this opportunity to convey our appreciation of the efforts made the government of Pakistan for the successful and fruitful privatization of various public entities."

"The ongoing privatization of various financial sector units, together with the encouraging banking reforms, has paved the way to fostering a competitive, market-based and professionally managed financial sector in the country," he said.

United Bank Ltd., he said, is "a premier banking institution and our cherished desire is to carry forward, with renewed spirit and zeal, its legacy and historical success to a more glorious future. We see United Bank Ltd., in the near future, to be a fore-runner of excellence in banking, both within and outside Pakistan." He pledged to bring forth, most effectively, UBL’s unique characteristics and strengths for enriching and contributing effectively to the economy of Pakistan, to the valued clients of UBL and the larger business community. "Our long-term vision is to make UBL a proactive and progressive bank and a caring corporate citizen." "The excellent, friendly ties between Pakistan and United Arab Emirates will be further strengthened with this acquisition," he said. Sheikh Al-Nahyan also expressed the hope that further investment in various sectors in Pakistan will receive UAE and his group’s close and deep consideration, and the purchase of UBL is only one of such first steps in that direction.

Sir Anwar Perveiz, chairman of Bestway Holdings Ltd., partner in ADG-BHL purchase said, "UBL is a premier institution in the local banking industry. Our effort will be to enhance its image locally and to make it a source of pride for Pakistan and a manifestation of the competence of our people in the banking industry in the international market." Top Pakistani leadership shares Sheikh Al-Nahyan’s hopes for larger foreign investment in this country, following the UBL deal. President Pervez Musharraf, applauding the deal said, "the government has demonstrated, once again, its confidence in the private sector as a major player in economic growth ... The economic benefits that Pakistan will derive from this transaction are going to be enormous." Finance Minister Shaukat Aziz, told Sheikh Al-Nahyan, the deal has "invigorated the faith of the private sector.

The international financial institutions now have trust in the privatization program of Pakistan." "The government has vigorously pursued the policy of restructuring and financial reform. It has restricted its role to policy-making, giving a vast level playing field to the private sector to shoulder the reconstruction of Pakistan’s economy," said Aziz.

Welcoming the ADG-BHL purchase of UBL, Minister for Privatization Altaf M. Saleem, said it is "an important economic milestone." It is the single largest strategic sale and the single largest investment by a foreign-overseas group."

28 October 2002