Saudi group mulls ‘options’ for Samba Bank

Published September 22, 2021
The logo of Samba Bank. — Photo courtesy Samba Bank Twitter
The logo of Samba Bank. — Photo courtesy Samba Bank Twitter

KARACHI: The parent company of Samba Bank is looking for “strategic options” regarding its shareholding in the locally listed bank, a regulatory filing said on Tuesday.

The language of the stock notice doesn’t clarify whether the parent company of the bank — which is the fourth smallest among all listed lenders in terms of the total value of shares — wants to sell its shareholding or acquire another bank to expand its footprint in the Pakistani market.

“SNB (Saudi National Bank) is considering all its strategic options in relation to its shareholding in Samba Pakistan, including potential mergers, acquisitions, divestment and/or restructuring,” the notice on the stock exchange said.

Speaking to Dawn, Head of Research at JS Global Amreen Soorani said the country’s banking sector is in a phase of consolidation. “Samba Bank forms an insignificant part of its parent group’s worldwide assets,” she said, adding that SNB is likely to take the divestment route.

“It seems to me that some potential buyers have approached the parent company of Samba Bank,” she said.

However, another banking sector analyst told Dawn that SNB appeared more inclined to stay on in the Pakistani market and acquire an already established lender to grow its business.

“Parent groups of at least three banks have indicated their Pakistan operations are up for grabs. What would SNB gain by advertising its intent to divest when bigger and better banks are already available for sale?” said the analyst while requesting that he not be named.

Another reason that he cited to support his understanding of the regulatory notice was the recent change in the parent company of Samba Bank.

Its previous majority owner, Samba Financial Group, merged with National Commercial Bank to become SNB early this year. “Samba Bank operated in Pakistan with a certain view. But that may have changed now because of the change in its parent group,” he added.

The share price of Samba Bank dropped 0.28 per cent on Tuesday to Rs10.62 apiece. However, it’s risen by as much as 72.4pc since the beginning of September. Its net profit amounted to Rs457.1 million in April-June, registering little change from the same quarter a year ago.

Published in Dawn, September 22nd, 2021

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