KARACHI - Faysal Bank Limited and the Royal Bank of Scotland Pakistan (formerly known as ABN AMRO Bank N.V.) on Wednesday confirmed signing of an agreement, which will allow FBL to take over local operations of RBS, upon regulatory approval. In a separate notices issued to Karachi Stock Exchange the other day, it was stated that FBL will acquire 99.37pc holding of RBS Pakistan for a total consideration of EUR41 million ($50.3m) which culminates in a share price of Rs2.5. In the local currency this amount stands at Rs4.298 billion. The transaction is expected to complete in third quarter of 2010. RBS Pakistan has 1,717,981,391 ordinary shares listed on the Karachi Stock Exchange, the Lahore Stock Exchange and the Islamabad Stock Exchange. In a statement issued by RBS here on Wednesday, Muhammad Aurangzeb, Chairman of RBS Pakistan said, We have successfully entered into a sale agreement with Faysal Bank for RBS Pakistan which comprises of retail, commercial, Islamic and onshore GBM and GTS businesses in Pakistan. Faysal Bank will be an excellent owner of the strong customer franchise we have established here in Pakistan. I am particularly pleased that our staff and customers will become part of one of the countrys progressive and growing banks which has such clear ambition to grow further in the local banking and financial services sector. This marks an important day for both of our organisations and from here we can look forward with confidence to plan for the future. I would like to personally acknowledge and thank our staff here for their professionalism and commitment during this period of uncertainty, they have continued to serve our customers and have served them well. President & CEO of Faysal Bank Naved A. Khan said: The acquisition will significantly contribute to Faysal Banks development and will be a major catalyst in achieving our growth strategy. Whilst expanding our geographical footprint, touch points, customer base and product portfolio, this acquisition will boost our ability to raise the bar of our service levels. Further, employees of the combined entity could have potentially greater career opportunities and development options. This agreement with Faysal Bank follows the completion of the strategic review and the announcement on 26 February 2009 that RBS was to dispose of its retail and commercial businesses across Asia along with the decision to exit its wholesale banking businesses in Vietnam, the Philippines, Taiwan (except the securities business) and Pakistan in an effort to refocus the Groups geographic reach across a smaller number of key markets. According to an analyst, this takeover appears to be the cheapest amongst the domestic transactions in the recent past. During the economic boom (FY03-FY08) we saw a large number of private sector acquisitions including Union Bank, Prime Bank, PICIC and MCB Bank (20pc strategic stake). These transactions were carried out an average premium of 4.5x BV while banks were then trading at an average PBV of 2.2x. He further said the acquisition would take FBLs branch network to 213, from 134 branches currently. FBL would also leapfrog four places to 7th in terms of total gross advances in the industry, which would rise to Rs154b. In terms of deposits, the bank would move up one place to the 10th, with combined deposits reaching Rs175b; and it would also jump to tenth place in terms of assets. It may be recalled here that this was the second time the bidding took place, after an earlier bid won by MCB Bank failed to go through due to regulatory issues last year. MCB had agreed to pay $87m for the bank which translated to a P/B multiple of 0.73x.