Major Arab bank eyes sale of RBS unit in Pakistan

The biggest publicly traded Arab investment bank is looking at acquiring a majority stake in the beleaguered Pakistan unit of Royal Bank of Scotland PCL, an official of the nation's central bank said Thursday.

In a Bloomberg report, a spokesperson for the State Bank of Pakistan said EFG-Hermes Holding SAE has expressed interest in buying the stake, after a proposed takeover of the unit was canceled due to unsettled disputes.

"They have applied for the permission from the central bank to conduct due diligence," Syed Wasimuddin, a spokesman for the State Bank of Pakistan, was quoted as saying in the report.

This is the second attempt by RBS to sell a stake in its local unit after MCB Bank Ltd., Pakistan's biggest lender by market value, canceled a proposed takeover due to unsettled issues on depositing shares as security. MCB had said in August it was willing to acquire 99.4 percent of RBS Pakistan for about $87 million.

In a statement to the Karachi Stock Exchange on Jan. 14, RBS Pakistan disclosed the Edinburgh-based bank is in the process of identifying new bidders for selling its stake.

This comes on the heels of the parent company posting the biggest loss in British corporate history, prompting it to sell or shut businesses in two-thirds of the 54 countries in which it operates.

MCB has no plans of participating in the sale again, according to Ali Munir, chief financial officer of the Lahore-based bank, in an interview in January.

Earlier, Pakistani lender Faysal Bank Ltd. said in a statement to the stock exchange last month that it will try to acquire a majority stake in RBS Pakistan.