MCB Bank is conducting due diligence to acquire a 55% stake in Telenor Microfinance Bank, the operator of the country’s leading digital payments platform, Easypaisa.

MCB is Pakistan’s fourth-largest bank with strong profitability and premium valuations, but it has lagged its peers on the digital front. Easypaisa, with over 20% market share in mobile money, could fill in that gap, but could also be a great challenge at the same time.

Easypaisa reportedly, is heavily loss-making and MCB’s ROE could come down by 2.5ppts.

Note that the deal is still in very early stages and may not actually take place.

In this note, we discuss how Easypaisa is positioned in the mobile money industry, its performance track is just 52%.

Courtesy – Intermarket Securities Limited (Abstract of report on subject)