Saudi sponsor to sell Samba Bank

KARACHI: Samba Bank Pakistan reported its Saudi Arabia-based parent company has decided to sell the bank as part of its strategic review.

A bourse filing said the Saudi National Bank (SNB) will commence "an orderly well-managed divestment" of Samba Bank. The parent company has also decided to appoint advisers to assist with the process.

The Saudi sponsor has asked Samba Bank to revert to the SNB directors "before commencing a process of due diligence based on the receipt of nonbinding offers and feedback from the market in the evaluation of this option".

The share price of Samba Bank dropped 5.73 per cent to Rs10.37 apiece. However, it's risen by as much as 64.6pc in the preceding 30 days.

Speaking to Dawn, Topline Securities Associate Director of Research Umair Naseer said it was premature to make a comment about the likely acquirer of Samba Bank. "It's likely to be a big, local commercial bank. The regulator also encourages acquisitions to ensure consolidation in the banking sector," he said.

Its previous majority owner, Samba Financial Group, merged with National Commercial Bank to become SNB early this year. The parent company announced on Sept 21 that it was considering all strategic options in relation to its shareholding in Samba Bank, including potential mergers, acquisitions, divestment and/or restructuring.

The vague language of the Sept 21 stock notice left analysts wondering whether the Saudi sponsor wanted to expand the footprint of the bank or sell it altogether.

Samba Bank is the fourth smallest among all listed lenders in terms of the total value of shares.

Based on its share price, the total value of Samba Bank amounted to roughly Rs10.45 billion.