The management of Summit Bank has finalized a scheme of amalgamation of its operations with Sindh Bank.
Summit Bank will be closing down its operations on December 29 as part of its merger with Sindh Bank, subject to the approval of State Bank of Pakistan (SBP).
The merger of Summit Bank with Sindh Bank is a unique business deal in the banking industry, where a profitable public sector bank run by a provincial government is acquiring a struggling private bank.
According to the draft submitted to SBP and the stock exchange, the bank’s management has set an effective date for closing of banking business in Karachi on December 29, 2017, or any other date as may be jointly requested by Summit Bank and Sindh Bank, and approved by the State Bank.
With effect from the suggested date, the banking license issued by the SBP to Summit Bank shall stand cancelled. Further, all the branches of Summit Bank shall become the branches of Sindh Bank and the branch licenses issued to Summit Bank shall be deemed to have been issued to Sindh Bank.
Sindh Bank may shift/merge/close such branches of Summit Bank as deemed necessary in terms of the branch licensing policy of the State Bank.
Besides, the entire undertaking of Summit Bank including all the property, assets and liabilities and all the rights and obligations of Summit Bank, without any further act, action or deed and notwithstanding the terms of any contract or other document or any rule of law, shall stand amalgamated with and vest in Sindh Bank, and as a consequence thereof Summit Bank shall stand amalgamated and vested with and into Sindh Bank.
The Sindh Bank will acquire all of Summit Bank’s properties and assets, movable or immovable of whatsoever nature and all deposits, cash balances, reserves, revenue balances, investments, statutory or other deposits with the State Bank and all title, rights or interest in or property as may belong to or be in the possession (physical or constructive) of Summit Bank.
In consideration for the amalgamation contemplated by the Scheme, every person who is a registered shareholder of Summit Bank shall be entitled to receive 01 (one) share of Sindh Bank for every 4.17 shares of Summit Bank held by such shareholder.
All employees of Summit Bank shall become the employees of Sindh Bank on their existing remuneration, for a period of one year from the ‘effective date’. They will however be issued fresh appointment letters in accordance with the employment policies and schemes of Sindh Bank and their designations and assignments could be reviewed.
With this merger between the two banks, Sindh Bank will enhance its size and outreach in a significant way to compete well with various commercial and public sector banks such as Bank of Khyber and Bank of Punjab.
The challenge for the new merged bank will to observe enhanced liabilities and resolve the issue of Non-Performing Loans while bringing new synergy with the wide network, operations and staff members.