Bank Asia to Acquire Bank Alfalah Bangladesh Operations

In a significant move that signals a consolidation of the private banking sector, Bank Asia Limited has formally convened an Extraordinary General Meeting (EGM) to seek shareholder approval for the acquisition of Bank Alfalah’s Bangladesh operations. This strategic maneuver, disclosed via the Dhaka Stock Exchange (DSE) and Chittagong Stock Exchange (CSE) this Sunday, marks a pivotal moment for the local financial landscape as domestic institutions continue to absorb the footprints of foreign multinational banks.

The decision follows a high-level board meeting held on 29 January, where Bank Asia’s directors greenlit the proposal to acquire the assets and liabilities of the Pakistan-based lender. To legalise this transition, the 13th EGM is scheduled for 12 April at 11:00 AM, conducted via a digital platform. Investors and shareholders registered by the record date of 26 February will be eligible to participate and exercise their voting rights regarding this landmark transaction.

A Strategic Pivot Toward Islamic Banking

Bank Asia’s top brass have indicated that this acquisition is not merely about expanding their ledger, but about dominating the Shariah-compliant banking segment. By integrating Bank Alfalah’s established infrastructure, Bank Asia aims to cement its position as a market leader among conventional banks offering Islamic financial services.

The groundwork for this deal was laid on 28 May last year with the signing of a Memorandum of Understanding (MoU). Since then, a rigorous due diligence process has been underway. PricewaterhouseCoopers (PwC) Bangladesh, the UK-based multinational professional services firm, is spearheading the audit and valuation alongside two other firms. Preliminary estimates suggest the acquisition price will hover around Tk 600 crore, though the final figure remains subject to the completion of the audit and regulatory approval from the central bank.

A History of Strategic Acquisitions

Bank Asia is no stranger to the complexities of absorbing foreign entities. Since its inception in 1999, the bank has consistently utilised acquisitions as a primary growth engine. This marks their third successful foray into purchasing a foreign bank’s local operations.

Interestingly, Bank Alfalah was previously a target for Sri Lanka’s Hatton National Bank (HNB). Although HNB received the requisite permissions from both Pakistani and Bangladeshi regulators to conduct a “look-see” audit, the Sri Lankan lender eventually withdrew from the process, clearing the path for Bank Asia to step in as the preferred suitor.