ISLAMABAD: The federal government has asked the State Bank of Pakistan (SBP) to divest its entire shareholding in House Building Finance Company (HBFC), which will pave the way for the housing finance company’s privatisation, officials say.
According to the Finance Division, HBFC is a public limited company in which the government held 62.50% shares while the remaining 37.50% stake was held by the SBP as of December 31, 2016.
Last week, the Privatisation Commission board approved MCB Bank, EY Ford Rhodes, Elixir Securities Pakistan (Private) Limited and Haidermota & Co (sub-contractor) as financial advisers for the privatisation of HBFC. The consortium will charge a minimum fee of Rs80.3 million.
In a meeting held on November 7, 2017, under the chairmanship of then finance minister that discussed the long outstanding issue of credit lines extended by the State Bank to HBFC and Zarai Taraqiati Bank Limited (ZTBL), it was decided to convert the credit lines of the central bank into equity in HBFC and ZTBL.
According to officials, the Cabinet Committee on Privatisation, in a meeting held on August 8, 2019, directed the Privatisation Commission to include HBFC in the active list of privatisation programme. The Finance Division also gave its nod for putting HBFC on the active privatisation list.
Subsequently, the Privatisation Commission drew up a plan for selling up to 100% shares in HBFC along with management control to a strategic investor.
Earlier, PTI Government’s efforts to boost the foreign exchange reserves have shown the results as the reserves held by the central bank have shot up to one and a half year, striking the $10-billion mark.
The foreign exchange reserves held by the central bank increased 18% on a weekly basis, according to data released by the State Bank of Pakistan on Thursday.
The current account deficit dropped 73% to $1.82 billion in first five months (Jul-Nov) of the current fiscal year compared to $6.73 billion in the same period of previous year, according to the central bank.
Foreign investment in sovereign debt instruments like treasury bills and Pakistan Investment Bonds (PIBs) “accounts for less than one-fifth of the increase in SBP’s net reserve buffers at current levels”, the central bank said