Temasek Buys More Shares in Pakistan's NIB Bank, Increasing Focus on Asia

Temasek Holdings Pte, the biggest shareholder of NIB Bank Ltd., bought more shares in the Pakistani lender as Singapore’s state-owned investment company increases holdings in Asia.

Temasek bought 6.35 billion rupees ($74 million) of NIB Bank’s shares, representing its portion of the lender’s rights offer, the bank said in a statement to the Karachi Stock Exchange. The Singapore company will also subscribe to any portion of NIB Bank’s 8.58 billion rupees rights offering that isn’t taken up, the Karachi-based lender said.

The Singapore firm’s participation in rights offerings by companies in its portfolio bolstered holdings. Temasek’s assets climbed 43 percent to S$186 billion ($146 billion) in the year to March 31, with Asian investments outside of Singapore and Japan making up 46 percent of the portfolio, according to the company’s annual report published in July.

Temasek owned 74 percent of NIB Bank as of March 31, 2010, according to the annual report. It bought more shares in the bank through Fullerton Financial Holdings Pte, which invests in financial institutions in emerging markets.

NIB Bank offered about 6.26 billion of rights shares at 1.37 rupees each, according to the statement. While the stock jumped 9.2 percent to 2.60 rupees yesterday, it has declined 38 percent since April 15.

The lender’s paid-up capital will increase to 103 billion rupees after the rights offer, it said.

The bank reported a loss of 10.1 billion rupees in 2010, after it took a charge of about 9.9 billion rupees in provisions, according to the statement.

NIB Bank said it has begun to experience a “strong” recovery and expects to “reverse a sizeable portion of these provisions” as it seeks to recover non-performing loans through negotiations and legal action against defaulting customers. It remains a “liquid, well-capitalized and sound” bank, it said.

To contact the reporter on this story: Netty Ismail in Singapore nismail3@bloomberg.net

To contact the editor responsible for this story: Andreea Papuc at apapuc1@bloomberg.net

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