KARACHI: Standard Chartered Bank Pakistan has signed a sale purchase agreement with Orix Leasing Pakistan Limited (OLPL) for amalgamation of its leasing subsidiary and divestment from modaraba. The official notification stated that the management of two financial companies principally agreed on amalgamation process on the completion of financial due diligence process in relation to a divestment of its shareholdings in Standard Chartered Modaraba (SCM) having 20% stakes and Standard Chartered Services of Pakistan (SCSP) with 100% stakes. The Standard Chartered management has decided to concentrate on its core banking operation while relieving out its business of financial services through amalgamation of a subsidiary, Standard Chartered Leasing Company (SCLC) with OLPL, and divestment in SCM. The deal would be sealed once it receives a nod from Security and Exchange Commission of Pakistan (SECP). It said the agreement has reached on negotiated prices, which would further settle once the deal is finalised from the regulatory side. The unit price of SCLC and SCM would be set at the time of conclusion of transaction, depending on the book value at that time. SCM operates mainly out of Karachi, along with two other branches in Lahore and Islamabad. It was established in 1987 as a perpetual modaraba, SCM is the largest modaraba in Pakistan by total assets. It primarily offers Islamic leasing and investment schemes for corporate and individuals through issuing the certificate of musharika. The modaraba registered a 10% year-on-year profit by March, which stood at Rs 140 million as compared to Rs 127 million of the last year. The Standard Chartered leasing subsidiary is one of the leading leasing companies in Pakistan, catering primarily to SME and retail customers, offering commercial and auto leasing and investment opportunities through certificate of investments. However, it incurred losses of Rs 211 million including accumulated loss, though it posted Rs 82.688 million profit in the six months of 2015. Standard Chartered Bank’s top leadership attributed the transition of business to the focus of core banking activities in the future. Standard Chartered Pakistan CEO Shazad Dada said the transaction represents a further step in Standard Chartered’s focus on the growth of our core client businesses including retail, corporate and institutional, commercial and Islamic banking. He said, “Both SCLC and SCM are successful businesses in their own rights and operate as entirely standalone entities but this divestment would have no impact on the bank’s existing operations in Pakistan and is based on the fact that they are not aligned to our strategic objectives in the country.” The analysts opined that amalgamation of SCLC with OLPL would bode well for the bank, as it would boost up its capacity of dealing with tough financial challenges.