Pakistan has approved the sale of its entire stake in First Women Bank Limited (FWBL) to International Holding Company (IHC), a United Arab Emirates (UAE) government-nominated entity, for $14.6 million (Rs4.1 billion). The transaction marks the first successful privatisation under the current administration and signals a strategic shift in the country’s approach to state asset sales.
The federal cabinet, chaired by Prime Minister Shehbaz Sharif, approved the deal on Thursday. Under the agreement, the new buyer will not only acquire the government’s 82.64% shareholding but will also inject Rs6.8 billion to meet the Rs10 billion minimum capital requirement set by the State Bank of Pakistan (SBP) over a five-year period. FWBL’s equity stood at Rs3.2 billion as of December 2023, meaning the buyer’s capital injection will significantly bolster its financial base.
The sale was executed under the Inter-Governmental Commercial Transactions (IGCT) Act, 2022, which allows negotiated deals with foreign governments, bypassing the traditional competitive bidding process. This legal pathway was introduced to fast-track the sale of state-owned entities to strategic foreign partners, particularly from Gulf nations.
The UAE-based IHC, chaired by Sheikh Tahnoon bin Zayed Al Nahyan, manages assets worth around $240 billion across more than 1,300 subsidiaries in diverse sectors including financial services, technology, healthcare, energy, and real estate. Although the company is privately owned, its government nomination qualified it for the transaction under IGCT regulations.
Officials familiar with the development said the bank was valued at Rs5 billion ($17.7 million), giving the government proceeds of $14.6 million for its majority stake. While the deal size is relatively small, it carries symbolic weight as the first successful sale of a state-owned bank in years. The final price was also higher than the Rs3.7 billion reference approved earlier this week by the Cabinet Committee on Inter-Governmental Commercial Transactions.
The government defended the transaction value, arguing that it exceeds FWBL’s net equity of Rs3.2 billion and provides the new owner with a unique opportunity to operate a commercial bank without the central bank issuing a new licence. The central bank has maintained a freeze on new licences, increasing the strategic value of the deal for the buyer.
Established in 1989 to enhance financial inclusion for women, FWBL has evolved into a regular commercial bank with 42 branches in 24 cities. It was first placed on the privatisation list in 1994 and underwent five unsuccessful attempts before this final sale. Its minor shareholders include Habib Bank Limited and MCB Bank with 5.78% stakes each, along with smaller stakes held by Allied Bank Limited, National Bank of Pakistan, and United Bank Limited.
The new owners plan to expand FWBL’s branch network to 200 in the medium term. As part of the agreement, IHC has been permitted to retrench up to 10% of the workforce immediately, while the remaining employees are protected from layoffs for 18 months.
The sale represents a rare privatisation success in a landscape where several major transactions have stalled. Efforts to sell loss-making entities such as Pakistan International Airlines and power distribution companies have faced repeated delays. However, officials remain hopeful that the PIA deal could move forward by the end of November.
The government views the FWBL sale as a confidence-building step for potential investors. It also illustrates the growing importance of G2G transactions in unlocking much-needed foreign capital amid fiscal pressures.
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