Saudi National Bank halts process to sell stake in Samba Pakistan

KARACHI: The Saudi National Bank (SNB) has ended its process of selling its equity stake in Samba Pakistan, according to a notification sent to the Pakistan Stock Exchange (PSX) on Tuesday.

“We have been notified that after completion of due diligence and an exploration for the sale of its shares in Samba Bank Limited (Samba Pakistan), the Saudi National Bank, as the majority shareholder of Samba Pakistan is terminating the process for the sale of SNB’s equity stake in Samba Pakistan,” the Samba Bank Limited said in a notice to PSX.

Bank Alfalah Limited (BAFL) announced publicly in April that it intended to purchase a majority stake in Samba Bank Limited. In May, the State Bank of Pakistan allowed BAFL to perform due diligence on Samba Bank. In August, BAFL said that it was in the final stages of the due diligence process.

Samba Bank’s gross income increased by 5.2 per cent in the third quarter of 2024 due to an increase in the non-markup interest income, the bank said in a quarterly report for the period ended September 30, 2024.

The bank’s operating expenses for the nine months increased by 11.8 per cent which is in line with costs associated with various initiatives undertaken by the bank and is materially less than the corresponding inflation rate, the report said.

Demonstrating effective management of its delinquent loan portfolio, the bank recovered more than Rs700 million against the classified portfolio, it added.The bank is continuously right-sizing its earning assets mix vis-à-vis credit risk. The asset base of the bank reduced by Rs259.5 million (ie 0.15 per cent) over December 31, 2023, and stood at Rs178.4 billion as of September 30, 2024, which primarily represents a decline of Rs12,866.2 million in advances, a decline of Rs5,196.7 million in lending to financial institutions and growth of Rs18,574.5 million in investments.

On the liabilities side, the interbank borrowings increased by Rs10,076.5 million, which was offset by a decrease in deposits by Rs10,220.2 million (ie 8.9 per cent). However, the current account savings account (CASA) mix has improved from 45.44 per cent in 2023 to 49.42 per cent in the third quarter of this year.

“The bank is in the process of expanding its footprint by adding 10 new branches to its branch network in 2024. Three new branches have already become operational, while the remaining seven new branches will become operational by close of 2024,” said the report.