The federal cabinet on Thursday approved the sale of its 100% stake in a state-owned commercial bank to an entity nominated by the United Arab Emirates government for $14.6 million (approximately PKR 4.1 billion).
According to sources, the deal was finalized under a negotiated agreement. The buyer has also been allowed five years to meet a minimum capital requirement of PKR 10 billion for the bank. As of December 2024, the bank’s equity stood at PKR 3.2 billion, meaning the new buyer will inject an additional PKR 6.8 billion to meet the required capital.
At a meeting chaired by Prime Minister Shehbaz Sharif, the cabinet approved the sale of 82.64% of government shares in First Women Bank Limited to the UAE-nominated entity, International Holding Company (IHC).
The Privatization Commission declined to comment formally, but a senior official described the deal as “seemingly small” yet significant due to the buyer’s global financial stature. The Prime Minister’s Office also did not disclose the agreement’s details.
According to sources, the UAE entity valued the bank at around PKR 5 billion ($17.7 million). Based on this valuation, the government will receive $14.6 million (PKR 4.1 billion) for its 82.64% stake.
The sale was conducted under the Inter-Governmental Commercial Transactions Act 2022, which does not require competitive bidding for government-to-government agreements. However, under the Privatization Ordinance 2001, any sale of state assets normally requires a competitive bid.
The agreement is expected to be signed on Friday in the presence of Prime Minister Shehbaz Sharif. Interestingly, IHC is not a state-owned entity but a private company. However, it qualifies under the IGCT law, which only requires the participation of a foreign government, not state ownership.
Sheikh Tahnoon bin Zayed Al Nahyan is the chairman of IHC. The company has total assets of approximately $240 billion and over 1,300 subsidiaries operating across sectors such as asset management, healthcare, real estate, technology, financial services, food, and energy.
A government official said the PKR 4.1 billion price exceeds the reference rate of PKR 3.7 billion approved by the Cabinet Committee on Inter-Governmental Commercial Transactions (CCoIGCT).
First Women Bank was established in 1989 to promote women’s financial inclusion but is also allowed to conduct general banking business.
So far, the Privatization Commission has not been able to sell any major loss-making entities, such as power distribution companies or PIA. However, officials hope that the PIA deal may be completed by the end of November.