Privatization of HBL confirmed lawful – Alfalah Securities Limited

Karachi: The Supreme Court of Pakistan has declared the privatization of Habib Bank Limited (HBL) lawful in a response to the petition filed by Dr. Akhtar Hassan Khan (former Federal Secretary Planning) presuming that the bidding process of HBL was not transparent and alleged that a benefit of PKR 18.84 bn, in respect to bonds issuance of PKR 9.84 bn and transfer of PKR 9 bn bad debts, was provided to the three bidders short-listed without announcing it in the Expression of Interest (EoI).

According to Alfalah Securities Limited, he further stated that these benefits if had been disclosed in the Expression of Interest (EoI), would have gained huge interest from several multinational banks and the privatization process would have appeared to be more transparent. However, a judgment of the Supreme Court has turned down all these allegations saying that the privatization process was in the purview of the Privatization Commission and was held in accord with the best practices around the world. Alfalah Securities Limited recommends a HOLD on HBL at current level as it is trading at a P/B multiple of 1.23 times against its peer average of 1.185 times.