Summit Bank surprised the banking industry with the profit of Rs 106 million it posted in the first quarter of 2017, given its previous results.
The bank closed the calendar year of 2016 with a whopping loss of Rs 2.17 billion. This showed the performance of the bank which is going to merged into another bank, Sindh Bank, in the next couple of months.
The mid-tier bank has not been sustainable in terms of its profitability as previously it closed the financial year with Rs 217 million and Rs 230 million in 2015 and 2014 respectively.
Summit Bank derived its profits from both interest-based and non-interest based income. Its income from interest-based avenues surged to Rs 755 million in the first quarter of 2017 as compared Rs 376 million reported in the similar period of 2016.
The bank non-interest income increased to Rs 689 million from the Rs 674 million recorded in the last year.
The overall revenue has increased to Rs 1.7 billion in the first quarter of 2017 as against of Rs 526 million stood in last year.
Finally, the earning per share turned positive, going to Rs. 0.5 from Rs 0.03 EPS negative.
Summit Bank and Sindh Bank will be merged during the second quarter of 2017, with the official approval of the banking regulator. The merger of these two banks is in the final stage presently. The newly merged bank could be named as Sindh Summit Bank.
Due to the merger process, Summit Bank has revoked its ambitious plan to convert its operations based on Sharia-based Islamic banking. On the other hand, Sindh Bank withdrew its application seeking listing with the Pakistan Stock Exchange.
“Currently both banks’ managements are not authorized to bring any change in the operational structure and business nature of each organization. Rather, they are focusing on day to day affairs of doing business of commercial banking. After the marriage of banks, new board and sponsor shareholders will decide the future course of the merged bank.”
Summit Bank is already a merger of three banks -Arif Habib Bank, My Bank and Atlas Bank – which is all set to merge into Sindh Bank, which is currently 100 percent owned by the Sindh government.