KARACHI: Working with around 40 branches throughout the country, Samba Bank Limited (SBL) has recently raised Rs 5 billion through Term Finance Certificates (TFCs) and informed its investors that the said amount had been received in its designated account.

The Fund raised via TFC will be utilised in business operations as permitted by Memorandum & Articles of Association of the Bank. The TFC will contribute towards the Bank’s Tier 2 Capital for complying with the Capital adequacy Ratio Requirements, subject terms and conditions prescribed in the State Bank of Pakistan’s (SBP’s) final approval, said a notice of the Bank here Wednesday.

SBL is a banking company incorporated in Pakistan and engaged in commercial banking and related services. The bank is a Samba Financial Group company of Saudi Arabia, and it is listed as a foreign bank at Pakistan Stock Exchange.

NCB and Samba announce merger 

National Commercial Bank (NCB) and Samba Financial Group (Samba) have agreed on a merger that will create the largest bank in Saudi Arabia with over SAR896 billion ($239 billion) in total assets, SAR127 billion ($34 billion) in shareholders’ equity and a combined net profit of SAR15.6 billion ($4.2 billion).

The investors of both voted in favour of the merger at separate extra-ordinary general assembly meetings this week. The new entity, which is to be headquartered in Riyadh, will be called Saudi National Bank and will begin operations from April 1.

Saeed Al-Ghamdi, chairman of NCB, said in a statement, “we will be uniquely positioned to transform the Saudi banking sector and propel the kingdom closer to its Vision 2030 goals, and I am very grateful for the opportunity to serve the people of Saudi Arabia alongside my colleagues and create a bank that delivers value for all stakeholders.”

The merger had previously received regulatory approvals from the Saudi Central Bank (SAMA), General Authority for Competition (GAC), Capital Markets Authority (CMA), and the Saudi Stock Exchange (Tadawul).

Ammar Alkhudairy, chairman of Samba, said: “This is a historic milestone for the Saudi banking sector, which will now have a powerhouse that is true ‘a bank for all’.”

Saudi National Bank’s new management structure includes the appointment of Alkhudairy as chairman and Al-Ghamdi as managing director.

In preparation for the proposed merger, NCB received approval from the CMA to increase its capital from SAR30 billion ($8 billion) to 44.78 billion ($11.94 billion) to issue new shares in NCB to Samba shareholders with a share swap ratio of 0.739 NCB ordinary shares for each Samba ordinary share, upon closing of the transaction.

Samba shares will be de-listed from the Saudi Stock Exchange on the effective date of the merger, and the company dissolved with all its assets, liabilities and operations transferring into Saudi National Bank.

Samba Bank

In Pakistan, Samba Bank has been asked to raise the Capital Adequacy Ratio Requirements for which it had raised Rs 5 billion through TFC in Pakistan.

In its 3rd quarterly report released in September 2020, it said that “On completion of merger NCB will continue to exist, whereas Samba Financial Group (SFG) will cease to exist as a legal entity and its shares will be cancelled and new shares in NCB will be issued to shareholders. Consequently, upon completion of the merger, the shares of Samba Bank Limited held by SFG will be transferred to the merged entity.”

“The Bank would continue to take effective measures for growth, keeping its core focus on steadily building up its earning assets, effectively managing the associated risks, and reduce its cost of funds through continued improvement in its deposit mix. This would be facilitated by the delivery of world-class banking services to the Bank’s valued customers,” it added.

The Profit Before Tax (PBT) for nine months’ period was Rs 1.502 billion in 2020 as compared to Rs 915 million for a similar period last year. This nine months’ PBT is higher than full last year’s PBT of Rs 1,100 billion. 

This increase is primarily attributable to the growth in net mark-up income, foreign exchange income and gain on sale of securities by Rs 270 million, Rs 149 million and Rs 480 million, respectively. 

As a matter of prudence, during the current quarter, the Bank has set aside a general provision of Rs 120 million against any potential credit losses that may be present in its corporate, commercial and SME loan portfolio due to various regulatory relief measure given to obligors to manage financial stress during Covid. 

The Bank’s Profit After Tax (PAT) was stood at Rs 923 million for the first nine months of 2020 compared to Rs 519 million for a similar period last year.

During the period, Advances witnessed a decline of Rs 1.12 billion. On the liabilities side, the Bank managed to mobilise low cost & medium to small ticket deposits with an overall deposit cost of 7.21% and closed its deposits book at Rs 76.56 billion with an increase of Rs 4.68 billion over the December 31, 2019 position.


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