BankIslami to study KASB Bank purchase

BankIslami second-largest full-fledged Islamic bank, has received regulatory approval to study the acquisition of KASB Bank Limited.Last week, Bankislami  board of directors approved a plan to raise 3.5 billion rupees ($34.8 million) via subordinated Islamic bonds to fund its expansion strategy.An acquisition could see Karachi-based Bank Islami add 105 branches to its existing network of 213, the lender said in a filing to the stock exchange late on Friday, while the transaction would require the conversion of KASB Bank’s conventional financial products into sharia-compliant ones.In November, the central bank placed KASB Bank under a six-month moratorium as it struggled to meet capital adequacy requirements.Islamic banks in Pakistan are expanding, buoyed by a government-wide push to develop the Islamic banking sector in the world’s second-most populous Muslim nation.In May, Karachi-based Meezan Bank received central bank approval to buy the local banking business of HSBC, while Summit Bank and Faysal Bank have plans to convert into full-fledged Islamic lenders in the next two to three years.There are five full-fledged Islamic banks in Pakistan as well as 14 Islamic windows, a practice which allows conventional lenders to offer Islamic financial services.