The State Bank of Pakistan (SBP) has authorized Bank Alfalah Limited to initiate due diligence of Samba Bank Limited.
Bank Alfalah, aiming for a majority stake in Samba Bank, disclosed this development in its notification to the Pakistan Stock Exchange (PSX) on Monday.
“Referring to Bank Alfalah Limited (BAFL) public announcement dated 9th April 2024 regarding its potential acquisition of 84.51% shares of Samba Bank Limited held by Saudi National Bank.
“We are pleased to inform you that the SBP has granted its approval to BAFL to commence due diligence of the target company,” the notice stated.
Last month, BAFL announced its intention to acquire a majority stake in Samba Bank Limited.
“We would like to inform that M/s Arif Habib Limited, manager to the offer, has submitted the public announcement of intention to acquire up to 84.51% shares of the target company, held by Saudi National Bank, on behalf of the acquirer,” the previous notice read.
In 2021, Samba Bank had received a firm intention from a consortium, including members of Samba Bank Limited’s management, Fatima Fertilizer Company Limited, and Gulf Islamic Investment LLC, to acquire control of 852.040 million voting shares, representing 84.51% of the bank’s paid-up capital.
However, that deal did not materialize.
Bank Alfalah operates one of the largest banking networks in Pakistan, with over 1,024 branches across more than 200 cities in the country and an international presence in Afghanistan, Bangladesh, Bahrain, and the UAE.
In a related development, SBP has given approval for the due diligence of Bank Alfalah Bangladesh to Bank Asia.
During the year 2023, Bank Alfalah posted a consolidated profit after tax of Rs36.09 billion, marking a significant increase of over 96% compared to the preceding year. The bank reported earnings per share (EPS) of Rs23.15, up from Rs10.38 in the same period last year.
However, despite higher net income, Bank Alfalah’s profit fell to Rs9.93 billion during the quarter ended March 31, 2024, nearly 8% lower than its earnings in the same period of the previous year. This decline in profit-after-tax (PAT) is attributed to much lower foreign exchange income, higher operating expenses, and increased taxation.
