State Bank of Pakistan has given green signal to Silk Bank to receive an investment from Gourmet Group for 12.05 percent stake which has fulfilled its paid-up capital requirement of Rs 10 billion.
According to details, the central bank approved a Fit and Proper Test (FPT) for its incoming investors and sponsor shareholders including Zulqarnain Chattha and Zubair Nawaz Chattha of Gourmet Group.
The remaining shares of 28.23 percent were finally subscribed by the underwriter Arif Habib Corporation Limited, which had earlier signed an agreement to invest money against all unpaid right shares.
Gourmet Group intended to invest Rs 3.7 billion in the mid-sized bank but its investment will be finalized by the board in the coming days once it okays the result of third quarter for the announcement to its shareholders.
Due to shortfall in the paid-up capital, Silk bank wasn’t allowed to open branches and add new products but now it will look to aggressively expand
Official sources said the bank’s management will set up its branches’ network which will include conventional and Islamic banking , Emaan but these branches will be be relatively smaller compared to operating branches in different cities.
The board of directors has planned to enhance its profitability to Rs 4.8 billion with twofold increase in the assets and expansion of business operations by 2020.
According to the five year strategic financial plan submitted to the central bank, the bank has made projections for its profitability and business expansion in the future.
Silk Bank has forecasted that its profit will be increased to Rs 887 million by 2015-end; Rs1.58 billion by end of 2016; Rs 2.8 billion by end of 2017; Rs 3.81 billion by end of 2018 and Rs 4.8 billion by end of 2019.
Similarly, its revenues will be increased to 6.9 billion by 2015-end; Rs 8.2 billion by end of 2016; Rs10.7 billion by end of 2017; Rs 13.08 billion by end of 2018 and billion Rs 15.4 by end of 2019.
However, the bank posted a profit of Rs 49.8 million in first quarter of 2015 but now it recorded a huge loss of Rs 95.6 million by end of first half of 2015 mainly because of 8 percent increased in interest income and impairment of non-banking assets impairment having affect of Rs 286 million
