Summit Bank completes acquisition of MyBank

Published: April 5, 2011
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59.3 per cent 
stake acquired for Rs2.5 billion.

59.3 per cent stake acquired for Rs2.5 billion.

KARACHI: 

The Summit Bank Limited has completed acquisition of MyBank Limited’s 59.3 per cent shares for Rs2.5 billion on Monday.

Summit Bank Limited bought 314.7 million shares of issued paid-up capital of MyBank at Rs8 per share, according to a notice sent to the Karachi Stock Exchange.

The share price of MyBank closed at Rs2.05 during trade at the Karachi Stock Exchange – much lower than the price paid.

In December 2008, UAE-based group Suroor Investment made its first step in the domestic financial sector by acquiring Arif Habib Bank followed by Atlas Bank and now MyBank. The three banks have been merged and re-launched as Summit Bank.

Suroor Investment made an investment of more than $125 million over the last four years to enter the domestic financial sector. They also plan to make an additional investment of $50 million.

These shares have been acquired from Iqbal Ali Mohammad and other shareholders, according to the notice.

As a result of the change in shareholding of MyBank Ltd, seven new directors have been elected. The move is, however, subject to approval from the State Bank of Pakistan.

Summit Bank’s stock fell Rs0.15 to close at Rs2.65, while MyBank’s stock rose marginally by Rs0.05 to close at Rs2.05 during trade at KSE on Monday.

Published in The Express Tribune, April 5th,  2011.

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Reader Comments (8)

  • Apr 5, 2011 - 10:49AM

    Due to presence of many banks in the market, I see mergers and acquisitions a very good step.Recommend

  • Mhk
    Apr 5, 2011 - 11:29AM

    unless and until a bigger bank (like atleast alhabib bank if not habib bank) acquires the smaller ones,it wont be of any good that small banks get merged,would certainly be in vainRecommend

  • Apr 5, 2011 - 11:46AM

    Doesn’t anyone find it mildly ridiculous that Suroor paid 4 times the prevailing share price for a extraordinarily mediocre bank? Its total deposits are 27bn and have remained as such for a very time indeed. A good deal negotiated by MYbank stakeholders. Recommend

  • hassan
    Apr 5, 2011 - 11:55AM

    how many jobs were lost in the process of these mergers ? how many branches are being shut ? the reporter should try to get all these information from the new management of summit bank.Recommend

  • Sameer
    Apr 6, 2011 - 9:38AM

    @hassan:
    I think, they will not be closed any branch but relocate and try to increase in their branch network.Recommend

  • Apr 6, 2011 - 10:25AM

    I agree with Hassan, SBP and other regulatory authorities should also bound both seller and buyer to take care of the employees affected as a result of these transactions. Usually that class or segment is badly affected who give their blood and soul for running these organizations on successfully. Whereas the Top notch always disappear after taking the benefit during their service tenure and even in the process of sale/purchase. There are many examples of such events in the recent past.Recommend

  • Wahaj Shariff
    Apr 7, 2011 - 11:28AM

    We need more mergers in the banking sector, we have quite a few minnows bank who are struggling to survive and are not making any impact for themselves and market. In my opinion there should be 8 – 10 big & financially strong banks in Pakistan.Recommend

  • MK
    Apr 7, 2011 - 11:53AM

    @Murtaza Ali Jafri

    Swap ratio is calculated by Chartered Accountant firm. Book value is also considered. Market price of the stock and the deposits are not considered as basis of swap ratio. Recommend

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