Summit Bank-Sindh Bank merger: SC seeks detailed report of evaluation process

KARACHI: The Supreme Court (SC) on Saturday directed the State Bank of Pakistan and the counsel of Summit Bank and the Sindh Bank to submit detailed report after completion of the evaluation process of the Sindh Bank’s merger with the Summit Bank.

The Supreme Court’s two member bench headed by Justice Faisal Arab inquired from the State Bank’s official about the developments related to the merger.

The SBP’s deputy governor Jameel Ahmed submitted that both the banks had submitted their merger proposal, but the bank is yet to meet the required capital requirement, risk management and other legal requirements mandatory for the merger. He said the SBP shall ensure that the balance sheets of the banks should be accounted for in the evaluation process through independent auditors. He submitted that the Sindh Bank’s management has been conveyed that the merger shall be approved by the provincial cabinet. He said the Summit Bank is facing losses and the evaluation process of the banks has not been concluded yet.

To a query about the losses of the Summit Bank and the debts, the Sindh Bank’s director said the bank shall adjust the losses of the Summit Bank in next 5 to six years and no financial loss would be caused to the bank. He said it was agreed that after the merger the employees would not be sacked for one year and after that the salaries and the staff shall be adjusted in accordance with the requirements.

The Summit Bank’s counsel Ali Zafar submitted that the issue of merger is premature as both the banks are still in the process of share swap arrangements and the evaluation of shares which shall be determined by the chartered accountants. He said after the evaluation by the charter accountants it is possible that the merger may not be take place. The court adjourned the hearing till May 5 and in meantime continued the interim stay of the final merger till further orders.