Standard Chartered, the emerging markets bank, is finalising an agreement to buy Pakistan's Union Bank in a deal likely to be worth at least $500m.
Shaukat Tarin, president of the Union Bank, the other day told the Financial Times: "The due diligence is complete. Now we are working on the sale purchase agreement." He did not elaborate on details such as price.
The prospective deal is the largest foreign takeover of a Pakistani bank and underlines the strong performance of the financial system in a country where some banks were close to default less than a decade ago.
It is also further evidence of Standard Chartered's appetite for expansion as the lender takes advantage of strong growth in emerging markets to strengthen its business around the world.
The bank is one of several prospective bidders for LG Card, the South Korean credit card lender. It also participated in the auction of a controlling stake in Denizbank of Turkey, which was even tually sold to Dexia of Belgium for $2.44bn.
Officials at Pakistan's central bank in Karachi said they expect to receive a formal request for clearance of the deal soon, which they said could be worth as much as $500m depending on the size of the stake purchased by Standard Chartered.
"We are not talking about months here. Maybe it's days or a week or two. I can't be exact but we are not too far away," said one central bank official.
Standard Chartered is understood to be keen to buy 100 per cent of Union Bank, which is the sixth largest listed lender in Pakistan.
The main beneficiary of the deal is likely to be Abdullah Basodan, the Saudi investor and chairman of Union Bank's board of directors, who is estimated to own 49 per cent of its stock.
News of the agreement has prompted expectations that other foreign banks may look to enter the Pakistani market, where banks have posted big profits helped by the country's economic recovery.
Union Bank has 53 branches across Pakistan and two overseas branches, both in Sri Lanka.