Saudi Bank considering 'all strategic options'

Saudi National Bank (SNB) is considering all its strategic options in relation to its shareholding in Samba Pakistan Limited, including potential mergers, acquisitions, divestment and/or restructuring.

"Saudi National Bank (SNB), as the immediate parent company of Samba Bank Limited, has notified that 'SNB is considering all its strategic options in relation to its shareholding in Samba Pakistan Limited, including potential mergers, acquisitions, divestment and/or restructuring (the "Strategic Review")", disclosure of material information sent to Pakistan Stock Exchange said.

Any decision relating to the strategic review shall be subject to internal approvals and may be subject to regulatory approvals as well as execution of definitive agreement, the information said.

It may be mentioned that SNB is the successor entity of Samba Financial Group, pursuant to a merger process in the Kingdom of Saudi Arabia, and regulatory formalities for the formal recording of Saudi National Bank as the successor entity in Pakistan under process.

The Monetary Policy Committee decided to raise the policy rate by 25 basis points to 7.25pc. Since its last meeting in July, the MPCnoted that the pace of the economic recovery has exceeded expectations.

This robust recovery in domestic demand, coupled with higher international commodity prices, is leading to a strong pick-up in imports and a rise in the current account deficit.

While year-on-year inflation has declined since June, rising demand pressures together with higher imported inflation couldbegin to manifestin inflation readings later in the fiscal year. With growing signs that the latest Covid wave in Pakistan remains contained, continued progress in vaccination, and overall deft management of the pandemic by the Government, the economic recovery now appears less vulnerable to pandemic-related uncertainty.

As a result, at this more mature stage of the recovery, a greater emphasis is needed on ensuring the appropriate policy mix to protect the longevity of growth, keep inflation expectations anchored, and slow the growth in the current account deficit.

In line with this shift in the economic outlook, the MPC was of the viewthat the priority of monetary policy also needed to gradually pivot from catalyzing the recovery after the Covid shocktoward sustaining it. As foreshadowed in previous monetary policy statements, the MPC notedthat thisrebalancingwould be best achieved by gradually tapering the significant monetary stimulus provided over the last 18 months. The MPC noted that over the last few months the burden of adjusting to the rising current account deficit had fallen primarily on the exchange rate and it was appropriate for other adjustment tools, including interest rates, to also play their due role.

The MPC noted that the stance of monetary policy is still appropriately supportive of growth, with real interest rates remaining negative on a forwardlooking basis. Looking ahead, in the absence of unforeseen circumstances, the MPC expectsmonetary policy to remain accommodative in the near term,with possible further gradual tapering ofstimulus to achieve mildly positive real interest rates over time.