The government has invited bids from financial advisers to assist in the privatisation of Bankers Equity, a specialist bank focusing on development finance.

It is the second financial privatisation to start this year following the appointment of Credit Lyonnais Securities as adviser for the sale of the commercial giant, United Bank.

Bankers Equity's major shareholder with 18.1 per cent is the State Bank of Pakistan. The other state-owned banks are also large shareholders, National Bank of Pakistan, Habib Bank, United Bank and Allied Bank, as well as Muslim Commercial Bank and National Insurance. The government intends to sell a strategic 26 per cent stake in the bank to an investor that will also take over management of the bank.

Bankers Equity has 21 branches throughout Pakistan and employs 341 staff. It has a capital of Rs 1,901.8 million ($61.5 million) and total assets of Rs 14,195.1 million ($459.5 million). The bank made a net profit of Rs 130.8 million ($4.2 million) in 1994.

The timescale for the sale is very short. Bids from financial advisers were due in by 20 March with an appointment expected in April and a sale organised before the end of 1995, the privatisation commission says.

However, the sale will not be easy, analysts in Karachi say. Bankers Equity shares are presently over-valued. The bank has sold off some of its best investment holdings in the last two years which temporarily boosted the bank's profits and share price.

In the second half of 1995, the government plans to start the privatisation of the National Development Finance Corporation (NDFC) which, like Bankers Equity, acts as a conduit for international development and aid finance.

Bids will be invited soon for advisers to assist in the privatisation of the Habib Credit & Exchange Bank (HC&EB) the corporate finance subsidiary of the state-owned Habib Bank, which is also marked for privatisation at a later date. HC&EB has branches in Karachi, Islamabad and Lahore.