Bank Asia is likely to acquire the Bangladesh operations of Karachi-based Bank Alfalah, according to information disclosed to the Pakistan Stock Exchange yesterday.

The disclosure, by Bank Alfalah itself, said its board approved in principle the non-binding offer given by Bank Asia to take over Bank Alfalah's Bangladesh operations, subject to compliance of all applicable laws and regulations as well as the necessary regulatory approvals.

"We will now seek approval from the State Bank of Pakistan for Bank Asia to commence due diligence on Bank Alfalah, Bangladesh," the bank said in the disclosure.

Bank Asia Managing Director Sohail RK Hussain said negotiations are still underway.

"But it is not linked to the ongoing discussion about the merger of some weak banks [with other banks]," he told The Daily Star yesterday.

He added that Bank Alfalah's Bangladesh unit is running smoothly.

Bank Asia's board will convene a meeting on Sunday, and will likely provide more details about the move afterwards, said a senior official of Bank Asia.

If the current deal carries through, it will be Bank Asia's third acquisition of a foreign bank.

In 2001, the private commercial bank acquired the operations of Canada-based Bank of Nova Scotia in Dhaka, the first of its kind in the banking history of Bangladesh, according to Bank Asia's website.

Subsequently, it also took over the Bangladesh operations of Muslim Commercial Bank Ltd, a renowned Pakistani bank.

Bank Asia started operations in 1999, and is a pioneer in Agent Banking services in Bangladesh.

It posted a 12 percent year-on-year increase in profit to Tk 305.47 crore in 2022. Its disbursed loans were Tk 28,960.27 crore till December last year, with 5.51 percent of it turning into bad loans, according to Bangladesh Bank data.

On the other hand, Bank Alfalah is one of the largest banks in Pakistan, with a network of over 1,024 branches across more than 200 cities in Pakistan, and an international presence in Afghanistan, Bangladesh, Bahrain and the UAE.

Its profit from the Bangladesh unit soared more than three times in 2023, which is Tk 43 crore, posting a 214 percent rise year-on-year.

Bank Alfalah started its operation in Bangladesh in 2005, and currently has seven branches in the country.

Its total disbursed loan stands at Tk 1,616 crore, of which 1.87 percent was bad loans last year, according to BB data.