Corporate result: Summit Bank profit down 5.3%

Reports unconsolidated earnings of Rs217.2 million in 2015

Our Correspondent March 07, 2016
Reports unconsolidated earnings of Rs217.2 million in 2015. PHOTO: FILE

KARACHI: Summit Bank has posted an unconsolidated profit of Rs217.2 million in 2015, which is 5.3% less than its earnings in the preceding year.

A stock notice on Monday reported (diluted) earnings per share of Summit Bank at Rs0.09 as opposed to Rs0.12 in 2014. The board of directors did not announce any cash dividend. Net interest income of the bank (post-provisions) amounted to Rs1.5 billion in 2015, down 20.9% from a year ago. In contrast, the year-on-year increase in non-interest income remained almost Rs1.2 billion.

Non-interest income amounted to Rs4.3 billion, as the increase of 81.8% in net gains on sale of securities helped non-interest income rise 38.4% year on year.

Deposits of the bank increased 13.8% to Rs119.8 billion at the end of 2015 as opposed to the rise of 6.1% in its advances that stood at Rs70.6 billion.

In contrast, Summit Bank’s investments rose 70.8% to Rs77.7 billion by the end of 2015.

With 137,000 shares changing hands on Monday, the Summit Bank stock closed flat at Rs3.35 per share on the Pakistan Stock Exchange.

Meanwhile, the board of directors has decided to issue one right share for every 8.9 ordinary shares at the par value of Rs10 per share, a separate securities filing said.

The objective of the right issue is to meet capital adequacy requirements of the regulator besides facilitating the expansion in the branch network. The board also announced its approval for the increase in the bank’s authorised capital from Rs20 billion to Rs25 billion. In addition, it approved changes in the bank’s memorandum of association that are specific to the Islamic banking business. The changes will help the bank achieve its strategic objective of converting from a conventional bank to an entirely Islamic bank.

According to its own financial projections, Summit Bank is expected to achieve annualised growth rates of 15.1% and 17.6% in deposits and advances, respectively, over the next three years.

Earlier, Summit Bank had issued 700.6 million new shares for Rs10 each to its major sponsor by way of other than right issue. Its paid-up capital was Rs17.78 billion after the receipt of Rs7 billion subscription money against the issue of 700.6 million ordinary shares to Suroor Investments, a major shareholder in the bank.

In December 2008, Suroor Investments had acquired Arif Habib Bank. It also acquired Atlas Bank and then merged the entities with MyBank to form Summit Bank.

Published in The Express Tribune, March 8th, 2016.

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