Karachi: On Monday, Summit Bank Limited’s Board of Directors gave approval for its merger with Sindh Bank. The merger will take place via a share swap transaction.
This merger stays subject to go-ahead from the regulatory authorities which includes the State Bank of Pakistan (SBP) and shareholders’ approval. The board meeting in this regard had been held on the 4th of August.
If this proposed merger goes ahead, these combined banks will have a market capitalization of over Rs30b and will have 500 branches spread across Pakistan.
In a notification sent to the bourse on Monday, which read:
SBP had eased the requirements of Capital Adequacy Ratio (CAR) and leverage ratio for Summit Bank and given it time till June 29th to improve its CAR. The bank had reported profit after tax for Jan-March of Rs84.78m compared to a loss of Rs649.33m in same period last year (SPLY).
In March, it had been reported following this merger plan, Summit Bank had shelved the plan to convert its operations into Sharia-based Islamic banking and Sindh Bank won’t be seeking listing on the stock exchange.
At the time of filing this report, Summit Bank’s shares were trading at Rs3.69 at the stock exchange down 15.14pc from its closing price yesterday.