Saudi finance group 6 billions to Pakistani bank
Saudi Arabia-Pakistan, Business, 11/18/2006

A Saudi financial group will inject Rs 6 billion into the Crescent Commercial Bank (CCBL) to save it from de-listing in the scheduled banks list of the State Bank.

According to Dawn newspaper, a notification was issued by the CCBL on Friday to the Karachi Stock Exchange informing it that the board of directors of the bank had approved the said investment.

Banking sources said that the Saudi financial group is the well- known Samba Group, which was earlier functional as the Saudi-American Bank.

The board, after deliberating over definitive investment propositions from a number of potential investors, has approved an investment of Rs 6 billion into the bank from a premier financial institution of Saudi Arabia, said the notification.

The investment is subject to the appropriate regulatory approvals and execution of definitive agreements, it added.

Bankers and analysts said the CCBL was in dire need of equity and the market value of the bank was not enough to raise money by issuing right shares.

"This was the only way to get an outside help to save the bank as the bank's equity position was in bad shape," said an analyst.

This was the only bank whose net interest income was negative during the last nine months of the current calendar year.

In the wake of the high rate of profits of the banking sector, the CCBL's performance was alarming.

The bank was unable to meet the requirement of the State Bank of Pakistan, which had directed it to raise its paid-up capital to Rs 3 billion by the end of December 2006.

The bank's paid-up capital was Rs 2.67 billion. If a bank fails to meet the paid-up capital requirement, it would be excluded from the list of scheduled banks.

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