Bank Alfalah agrees to transfer ownership of its Bangladesh operations to Bank Asia.
Pakistan's Bank Alfalah to Sell Bangladesh Operations to Bank Asia
In a significant move, the Board of Directors of Bank Alfalah Limited (BAFL), a prominent commercial bank in Pakistan, has approved the sale of its Bangladesh operations to Bank Asia Limited, a private-sector commercial bank based in Dhaka.
BAFL disclosed this development to the Pakistan Stock Exchange (PSX) on Thursday. The sale, however, is contingent upon approvals from the State Bank of Pakistan (SBP), the Central Bank of Bangladesh, and other regulatory authorities, along with the compliance of necessary legal and procedural requirements, and the execution of definitive agreements.
An Memorandum of Understanding (MoU) was signed between the two banks on May 28, 2025.
Established in 1999, Bank Asia expanded its operations via acquisitions, including the purchase of Bank of Nova Scotia branches and Muslim Commercial Bank Limited’s (MCB) Bangladesh operations. In 2001, it also acquired Scotiabank’s operations, which entered Bangladesh in 1999.
BAFL, with over 1,024 branches across more than 200 cities in Pakistan, boasts an international presence in Afghanistan, Bangladesh, Bahrain, and the UAE. The bank reported a profit after tax of Rs7.04 billion for the quarter ended March 31, 2025, translating into an earnings per share (EPS) of Rs4.46, and also declared an interim cash dividend of Rs2.5 per share, equating to 25%.
News of this sale follows a prior attempt by BAFL to sell its Bangladesh operations to Sri Lanka’s Hatton National Bank, which fell through in April 2025 despite preliminary approvals.
For BAFL, this strategic shift in focus to its core markets and streamlining of international operations represents an opportunity to reallocate resources towards more profitable segments and markets. For Bank Asia, acquiring BAFL’s Bangladesh operations will allow it to bolster its presence in the competitive Bangladesh banking sector.
The transaction will progress only after regulatory clearance and the signing of definitive sale agreements. The timeline for the completion of the deal remains uncertain at this stage.
- In light of the sale agreement, Bank Asia Limited, a leading player in Bangladesh's banking-and-insurance industry, is expected to witness an increase in its dividend through the acquisition of Bank Alfalah Limited's operations.
- The finance industry in Bangladesh will experience a notable shift with Bank Alfalah's assets, as the sale to Bank Asia is predicted to influence the index of company valuations and competitive landscape.
- This strategic move by Bank Alfalah toward refocusing on its core markets and optimizing international operations aligns with broader trends in the business world, such as the growing influence of defendi-based institutions and resource allocation for high-yield segments and markets.
