ISLAMABAD: Small and Medium Enterprise (SME) Bank, which had been incurring continuous losses since 2010, would expected to earn revenue of Rs 6 billion upon successful privatization, Minister for Privatization, Daniyal Aziz made these remarks here on Wednesday.
He was chairing a meeting convened to approve the opening of data room for buy-side diligence of SME Bank Limited. As the Privatization Commission (PC) continues to proceed ahead with the privatization of SME Bank Limited, while inviting qualified potential bidders to conduct due diligence of SME Bank Limited, would aim to conclude the privatization process during the current fiscal year, said a news release.
SME Bank has been incurring continuous losses (net loss after tax) since 2010, resulting in total inappropriate losses of Rs 2.7 billion, while continuing to remain exempted from the minimum capital requirement prescribed by the State Bank.
In response to PC’s invitation for acquisition of majority shareholding of SME Bank Limited, five parties expressed interest, out of which three internationally recognized financial institutions, namely FINCA Microfinance Bank, Saudi Pak Industrial and Agricultural Investment Bank and Lanka Orix Leasing Company, were prequalified after a thorough evaluation by PC.
Incidentally, Lanka Orix Leasing Company, a Sri Lanka based financial institution, withdrew from the process citing its inability due to strict exchange control regime of Sri Lanka.
Previous attempts to restructure the bank also include two voluntary severance schemes (VSS) to the employees of SME Bank in 2003 and 2009, wherein more than 800 employees opted for the VSS. The PC intends to ensure safeguarding employees’ interest in accordance with the applicable laws.
