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MCB Bank drops plans for stake in Burj Bank

Pakistan’s MCB Bank will set up a wholly owned Islamic banking subsidiary while dropping plans to take a stake in Islamic lender Burj Bank. In March, MCB started due diligence on taking a 55% stake in unlisted Burj, which held assets worth 53.3 billion rupees ($547 million) as of December, but it said it would not proceed for commercial reasons. Those plans would have included an additional investment by the private-sector arm of Jeddah-based Islamic Development Bank, which already holds a 33.9 percent stake in Burj. Bahrain’s Bank Alkhair is its largest shareholder, with a 37.9% stake in Burj, which it has classified as held-for-sale since June 2012. The move comes amid increased activity in Pakistan’s Islamic banking sector, with regulators stepping up development efforts and lenders expanding operations in the world’s second-most populous Muslim nation.

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