Daily Times

KARACHI: The Sindh Bank and Summit Bank officially announced on Thursday to go for a merger but are still waiting to seek an NOC from Supreme Court of Pakistan with the permission from State bank of Pakistan (SBP).The banks are expecting official confirmation/approval by September 30, 2018.

The banks will be amalgamated forming a new commercial bank – Sindh Bank, which will have a strong branch network of 525 branches, comprising of 330 Sindh Bank branches and 195 Summit Bank branches. The network will contain both Islamic and conventional banking systems.

The paid-up capital of the new bank created through the joint venture of the two entities is Rs 27 billion.

In this regard, a high-level delegation of stake holders is scheduled to be held on August 31, 2018.

It is pertinent to mention here, that the plan for this merger between the two banks was initiated in June 2016, while it remained in the process of execution in 2017 to finally come to a possible merger in 2018.

The merger also carries some interesting facts as both the banks under all compulsion have to maintain a specified balance sheet as per the international market standards.

If the paid up capital fails to meet the minimum requirement of Rs 37 billion, it would decrease Rs 10 billion from the announced paid up capital value of the merger.

Mohammad Bilal, Director, Sindh Bank while commenting on the landmark merger said, “Other than an impact within the listings, an expanded branching network will substantially benefit the financial sector of Pakistan ”

In a meeting held earlier, the Board of Directors of Sindh Bank had approved the swap ratio of 1:8.37, which meant one share of Sindh Bank to be equivalent to 8.37 shares of Summit Bank, and the swap price had been presented to the shareholders in EOGM and the Sindh Cabinet Committee for their respective approvals.

A conclusive approval on the recommended swap ratio will only be finalized in the meeting that will take place on August 31.

The CEO of summit bank Ahsan Khan Durrani denied all allegations and rumours on money laundering by their CEO saying that “We refute all such baseless allegations and are carrying out a structure and calculated legal process to ensure transparency.”

It should also be mentioned here that in case of a possible merger, State bank of Pakistan (SBP) will duly ensure that all depositors’ possession remains safe and intact.

Also, since SBP closely monitors all activities within the banking sector of the country, it will ensure that the merger abides by the law of eliminating all possibilities of employee termination or an untimely change in the designations within the employees of both banks.

Published in Daily Times, August 17^th 2018.