KARACHI, Pakistan, April 11 — Pakistan will raise more than US$1 billion (RM3.66 billion) by selling its entire stake in Habib Bank Limited, a government official said today, a deal that will be the country’s biggest privatisation so far.

The government will sell its 42.5 per cent stake in Pakistan’s biggest bank at 168 rupees (about RM6.16) per share after a successful book-building exercise last week, Mohammad Zubair, the chairman of the Privatisation Commission, said.

“It was an international and domestic offering and we received tremendous response from both the markets,” he told reporters.

“Pakistan will be richer by around over a billion dollars due to this transaction and the bulk of money, more than US$764 million, is in foreign exchange.”

The sale is part of Pakistani Prime Minister Nawaz Sharif’s plans to privatise 68 public companies, most of them loss-making. They include two gas companies, an oil company, about 10 banks, the national airline and power distribution companies.

The government has said the sell-offs will prevent further losses and stabilise an economy crippled by power shortages, corruption and militant violence.

Habib, Pakistan’s oldest bank, is 51 per cent owned by the Agha Khan Fund for Economic Development and 7.5 per cent by private investors.

Habib’s balance sheet grew by nine per cent last year to US$19 billion, according to its 2014 annual report. Profit after tax increased by 38 per cent to US$318 million and earnings per share increased from US$0.15 in 2013 to US$0.22 for 2014.

“This strong performance was primarily driven by a 25 per cent increase in total revenue,” the report said.

Last month, Habib announced that it had signed an agreement with Barclays Bank Plc for the acquisition of the Barclays banking business in Pakistan, subject to regulatory approvals.

Amreen Soorani, an analyst with JS Global Capital Limited, said she expected Habib’s earnings to grow at a five-year compound annual growth rate of nine per cent, partly driven by increasing retail interests and remittances.

But falling interest rates might eventually hurt profitability, she said. Pakistan’s State Bank cut interest rates to eight per cent last month, an 11-year low.

Zubair said that Habib had interests in multiple sectors and was expected to provide some local financing for the Pakistan-China economic corridor, a US$45.6 billion project involving rail, road, and energy links.

Chinese president Xi Jinping is expected to visit Pakistan this month and sign a number of agreements related to the project. — Reuters