BankAmerica Corp. has obtained a mandate from Pakistan to privatize a government-owned industrial finance corporation.

The deal underscores how the gradual deregulation of Pakistan's financial markets is opening up opportunities for U.S. and other foreign banks. It also marks a small but significant breakthrough for the San Francisco-based bank's efforts to build up a capital markets business in developing countries.

Syed Ali Raza, BankAmerica's senior vice president and regional manager for Pakistan, said the San Francisco-based bank hoped to complete the sale of National Development Corp., a $700 million-asset industrial finance bank, to private investors within five months. He did not exclude the possibility that the company might be sold to foreign buyers.

"We will sell to the highest bidder," Mr. Raza said in a telephone interview from Karachi.

BankAmerica has entered the bidding to obtain three or four other privatization mandates in Pakistan as the country adopts market-driven policies under a program sponsored by the International Monetary Fund.

As part of the program, Pakistan is planning to sell the country's three biggest banks: Habib Bank, National Bank of Pakistan, and United Bank of Pakistan. The three government-owned banks control about 67% of Pakistan's estimated $20 billion-asset banking market, excluding assets of foreign banks in the country.

"The objective is to privatize as soon as possible," Mr. Raza said. He predicted that United Bank would probably be privatized at the end of this year and that the other two banks will be sold off afterward.

BankAmerica entered the Pakistani market in 1961 and today operates from branches in Karachi, Islamabad, Lahore, and the cotton and textile city of Faisalabad. It is one of four U.S. banking companies operating in Pakistan, the others being Citicorp, American Express Bank Ltd., and Chase Manhattan Corp. Citicorp, which has five branches in Pakistan, is the only U.S. bank that is also involved in retail banking, including credit cards.

Until recently, BankAmerica focused mainly on trade finance and correspondent banking but has since directed its efforts toward developing capital market-related activities, mergers and acquisitions, and privatizations. Mr. Raza added that BankAmerica is also seeking to help develop local capital markets by arranging issues for Pakistani companies.

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