MCB Acquires RBS

Presented By:

Haris Ayaz Zohaib Sarfaraz Hafiz Faisal Muhammad Adnan Ayaz Bilal

Slides Map
Introduction About MCB About RBS Acquisition Reasons Acquisition Details Post Acquisition Effect Delays in Acquisition Conclusion

Introduction
MCB has reached an agreement with RBS to acquire its assets. Financial Crises lead this acquisition Shows financial power of MCB. Business and Politics

About
Incorporated by Adamjee Group July 9,1947 Nationalized in 1974 by Zulfiqar Ali Bhutto Privatized in 1991 to Nishat Group

4th Largest Bank of Pakistan , assets of US$6.7 billion

Customer Base 04 Million Over 1026 Branches , Over 300 ATMs

About

About
RBS Group is a British Banking & Insurance Holding Company. It based in Edinburgh Scotland and is the world's largest company by assets. Group founded in 1727 by King George. It is one of the largest group in world with Pound 10.3 billion operating profit, total asset of Pound 1900.5 billion in 2007. It has 40 million customer in 50 countries across 6 continents & about 226,000 employees. RBS came into Pakistan in last quarter of 2007 after acquiring ABN Amro Bank. Suffered Losses in recent times and biggest losses in history of RBS.

About

Acquisition Reasons

Triggered by economic downfall RBS suffered loss in 2008 $34.2bn, which is the biggest annual loss in the UK corporate history. which is the core reason for downsizing its business. The RBS exit comes at a time when it was in the process of reorganizing the business of ABN AMRO, which it bought at peak of the global financial crisis in 2007. It is only logical for RBS to give up operations in Pakistan.

Acquisition Reasons

Current capital constraints on the RBS Group and the need for RBS to reduce the size of its balance sheet means it is unable to provide the investment the business in Pakistan requires to achieve its growth potential. sale of Pakistan operation by RBS is part of the strategic decision to sell assets globally as it plans to exit 36 countries and focus on UK core businesses.

Acquisition Reasons

RBS said it was also close to agreement with the Treasury about terms for insuring 325 billion pounds ($530 billion) of troubled assets, a step which will increase the governments stake in the bank from the current 70 percent to more than 80 percent.

Acquisition Details
Purchase of 1,707,107,891 Shares @ Rs. 4.22 per share and total of 99.37% 0.76 times 9.888 Billion Rupees Around 7.5 Billion Rupees to pay RBS plan to exit in 3 to 5 years

Post Acquisition
MCB branches would be 1139 Deposits would be Rs 413 billion 75 RBS Pakistan branches in 24 cities Branches with good human resource Would have one less competitor Employees MCB 10,160, RBS 1,860 Total 12,020

Delays in completion
State Bank of Pakistan Political Reasons MCB Workers Union issues

Conclusion
RBS is exiting 36 countries due to economic crises MCB is planning to expend its network looking at the future investments Business and Politics

Thank

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