DUBAI: Pakistan's central bank has given Meezan Bank Ltd approval "in-principle" to purchase the local banking business of HSBC, the sharia-compliant lender said in a bourse filing on Wednesday.
The statement did not give a price for the deal, which still requires shareholder approval and final consent by the regulator.
The sale is part of a strategy by Europe's biggest bank to exit from countries where it is unprofitable or lacks scale. HSBC's Pakistan unit has 10 branches and had assets of about $455 million at the end of 2013.
In contrast, Pakistani lenders are expanding, buoyed by regulatory steps to develop the Islamic banking sector in the world's second-most populous Muslim nation.
HSBC and Meezan Bank agreed the deal earlier this month, which is expected to be completed in the second half of 2014.
There are five full-fledged Islamic banks in Pakistan as well as 14 so-called Islamic windows, where conventional lenders offer Islamic financial services. Several are looking to grow or spin off existing operations while new entrants are also expected. (Reuters)