The management of Samba Bank Limited has decided to float a Rs. 5 billion Term Finance Certificate (TFC) to raise funds for the expansion of its operations in Pakistan.
According to the stock filing, the bank’s board of directors has given the go-ahead for this connection and has directed the management to obtain the necessary approvals from the regulatory authorities.
The funds will contribute to the bank’s Tier 2 capital requirement to comply with the capital adequacy ratio as prescribed by the State Bank of Pakistan.
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Samba Bank is a foreign bank operating in Pakistan with 40 branches in the major cities of Pakistan. It is also part of the Saudi Financial Group (SFG) that is based in the Kingdom of Saudi Arabia. The bank has been in the limelight since its selection from among eight others to provide the Roshan Digital Accounts service to overseas Pakistanis.
The bank made a hands profit growth of 77 percent year-on-year in the three quarters of 2020 which increased to Rs. 923 million. It is now set to make a profit of Rs. 1 billion in 2020 for the first time in its history.
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Samba Bank’s parent entity was recently part of a legally-binding merger agreement with the National Commercial Bank (NCB) of Saudi Arabia. This merger will be implemented through the merger of the SFG with the NCB which will result in all of the assets and liabilities of the SFG being transferred to the NCB.
On the completion of the merger, the NCB will take over the SFG which will cease to exist as a legal entity. Consequently, the SFG’s shares will be canceled and new shares in the NCB will be issued to the shareholders of the SFG. Furthermore, the shares of Samba Bank Limited that are held by the SFG will be transferred to the merged entity.
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