Summit Bank will merge into Sindh Bank by the end of September 2018. After the merger, paid-up capital of Sindh Bank will stand at Rs. 27 billion. By the end of 2018, Sindh bank will issue an Initial Public Offering (IPO) and raise its capital up to Rs. 37 billion.
This was disclosed at Summit Bank head office in Karachi. Acting President and Chief Executive Officer (CEO) Summit Bank Ahsan Khan Durrani, President and CEO Sindh Bank Tariq Ahsan and Director Sindh Bank Muhammad Bilal were also present.
CEO and President of Sindh and Summit bank informed the journalists that before the merger Sindh Bank’s paid-up capital is Rs 17 billion and Summit Bank’spaid-upp capital stands at Rs 10 billion. After the merger, it will be Rs. 27 billion.
Muhammad Bilal told that after merger Summit Bank will dissolve and Sindh Bank will represent the joint entity. State Bank of Pakistan (SBP) bound Sindh Bank to be listed in Pakistan Stock Exchange (PSX) within 3 years. Sindh Bank will issue an IPO before the end of 2018.
Share Swap Ratio
Muhammad Bilal told that in 2016 both banks decided to merge. The share swap ration was set according to the value of accounts by the end of December 2016 and it was sent that 4.17 shares of Summit Bank will swap with 1 share of Sindh Bank. But this merger scheme was not fulfilled during the time period set in the agreement.
“The new share swap ratio is set at 1: 8.73 for Sindh and Summit Bank. New share swap ratio is set according to both banks’ audited accounts at the end of December 2017,” Bilal told.
Muhammad Bilal added that both banks’ Board of Directors approved the share swap ratio and this will be represented in the shareholders meeting which is scheduled for August 31. After this, the board will present a merger scheme in front of the Supreme Court (SC) and obtain approval.
“It is hoped that the merger will be complete by the end of September 2018,” Bilal told.
Muhammad Bilal disclosed that Sindh Bank wishes to grow faster. Currently, Sindh Bank has 330 branches all over the country. On the other hand, Summit Bank has 195 branches in operation and 30 new branch approvals in hand. After the merger, the total branch network will grow to 525 branches.
Summit Bank international trade business is also very strong and major cause of the merger.
Ahsan Khan Durrani said that Summit Bank was not able to fulfill its paid-up capital requirement set by State Bank of Pakistan (SBP). It is in favor of shareholders and its customers to merge into a stronger bank.
The non-performing loans of Sindh Bank stand at Rs. 3.5 billion while Summit Bank’s stand at Rs. 17 billion as of December 2017.