KARACHI: Sindh Bank, currently engaged in acquiring Summit Bank, would put its shares on sale to the public in 2018 as it looks to raise capital at the Pakistan Stock Exchange (PSX) and meet capital adequacy ratio (CAR) requirements. The state-owned entity is currently in the process of acquiring approvals for the amalgamation and merger with Summit Bank.We (Sindh Bank and Summit Bank as one entity after merger) would still be short of Rs10 billion to meet the 11.90% CAR for December 2018 and 12.5% for December 2019,” Sindh Bank board member Bilal Sheikh said at a media talk at the Summit Bank head office on Thursday.
The two banks hold a combined paid-up capital of Rs27 billion, which comes to 11.275% CAR at present, he said.
He said the plan to raise capital amounting to Rs10 billion through sale of shares and/or through injection of equity by the Sindh government would increase CAR to 13%. He said the board of directors may recommend the government to put 30-40% shares of Sindh Bank on sale to the public right after completing the acquisition process for Summit Bank. The two banks have convened a combined Extraordinary General Meeting (EGM) of shareholders on August 31 to acquire their approval for the amalgamation and merger of Summit Bank with and into Sindh Bank.
Afterwards, the merged entity would request the Supreme Court on September 30 for its final approval, which if and when granted, would merge the two banks into one entity as Sindh Bank. Last week (August 6), the board of directors of the two banks revised down the value of Summit Bank and recommended the same for approval. They recommended one share of Sindh Bank equivalent to 8.3 shares of Summit Bank from the previously recommended swap ratio of 1:4.17, according to a notification sent to the PSX by Summit Bank.
