Sindh Bank merger with Summit Bank was officially announced on Thursday, the merger documentation would be completed by the end of August on 31. Both the organizations are waiting for No Objection Certificate (NOC) from the Supreme Court of Pakistan and permission from State Bank of Pakistan (SBP). The banks are hoping to get official approval by September 30.
The banks will be merged to form a new commercial bank, the new bank will have a strong branch network consisting of 330 Sindh bank branches and 195 Summit bank branches, it will continue to offer both conventional and Islamic banking under the new system.
The high echelon officials meeting will be held on August 31 to discuss various paid capital Rs27 billion and joint venture issues, the possible merger between both banks was first surfaced in 2016 which went through a long process of execution and it came into its final stages in 2018.
The merger also has some compulsions to follow such as maintaining specific balance sheet as per international standards. Secondly, if paid up capital fails to meet the minimum requirement of Rs 37 billion it would be decreased to Rs10 billion for the announced paid-up capital value of the merger.
Sindh Bank’s director Muhammad Bilal said, “Other than an impact within the listings, an expanded branching network will substantially benefit the financial sector of Pakistan ”
In an earlier meeting, the BOD of Sindh Bank had approved the swap ratio of 1:8.37, which indicates that Sindh Bank share is equal to 8.37 shares of Summit Bank, this swap price had been presented the Sindh Cabinet Committee and the shareholders in EOGM for approvals. A final decision and approval on the recommended swap ratio will be done in the meeting which is scheduled for August 31.
Ahsan Khan Durrani CEO Summit bank, said the allegations and rumors on money laundering are false “We refute all such baseless allegations and are carrying out a structure and calculated legal process to ensure transparency.”