MCB merges with Arif Habib Investments

MCB Bank, its sponsors and Arif Habib shareholders signed the proposed merger agreement of their asset management companies.

The shareholder agreement was signed by the two companies in presence of Mian Muhammad Mansha and Mr. Arif Habib, who also signed the agreement on behalf of Arif Habib Corporation Limited. Mr. M. U. Usmani, President MCB Bank signed the agreement on behalf of the Bank, in presence of Mr. Ali Munir, SEVP of MCB Bank. The two groups had initiated the deal with an in-principle understanding by signing an MOU a few months ago.

The groups feel strongly about sharing resources to provide better services to a diverse segment of investors ranging from small savers to large, sophisticated investors. The merged entity is likely to have risk averse products such as money market and government securities funds, capital protected funds, somewhat higher yielding fixed income funds, and higher risk reward options such as hybrid funds and stock market funds. Investors will have access to these products through branch networks of MCB and other large commercial banks.

Mian Mansha who is Chairman of the Board of MCB Asset Management besides being Chairman of MCB Bank will continue as the Chairman of the merged entity representing MCB Bank, which will become the single largest majority shareholder in the merged entity.

Arif Habib Corporation will be the second largest shareholder in the merged entity followed by employees of Arif Habib Investments and general public.  The Board will have representation of both groups and independent directors.

The company is likely to be renamed “MCB-Arif Habib Savings and Investments Limited”, or another name agreed by shareholders. The name is likely to have representation of both groups. The new entity is expected to have a larger capital base of Rs. 660 million and MCB Bank will be entitled to receive 1.2 shares of Arif Habib Investments for every one share of MCB Asset Management.

Mr. Yasir Qadri, currently CEO of MCB Asset Management is proposed to continue as CEO of the new company while Mr. Nasim Beg currently CEO of Arif Habib Investments will serve on the Board as Executive Vice Chairman, subject to regulatory approvals.