Islamabad June 13 2023: The Board of Director decided to change the name of Summit Bank Limited, according to Bank’s filing to the exchange.
Bank price move up 8 paisa or 4.49 percent in today trading at Pakistan Stock Exchange.
The Summit Bank Board (SMBL) has given the ‘in-principle’ approval for change of name of the Bank and further authorized the President & CEO of the Bank to take all necessary steps and ensure compliance with the requirements as prescribed in the Companies Act, 2017 and the Banking Companies Ordinance, 1962.
The Board has approved the renewal of employment contract of Mr. Jawad Majid Khan, the President and Chief Executive Officer of the Bank for a period of further three (03) years effective from March 27, 2023 subject to approval of tile State Bank of Pakistan and compliance with all applicable laws, rules and requirements in this regard.
After the quarter ended March 31, 2023, the Bank received all the necessary regulatory approvals and has issued the shares to the Investor who subscribed for PKR 10 billion at a price of PKR 2.51 per share, with a face value of PKR 10 each.
During the quarter ended, the Bank has incurred a net loss of PKR 927.920 million resulting in accumulated losses of PKR 42,618.906 million and negative equity of PKR 18,680.918 million. As per the applicable laws and regulations, the Bank is required to maintain Minimum Paid-up Capital (net of losses) (MCR) of PKR 10 billion, Capital Adequacy Ratio (CAR) at 11.50% (inclusive of Capital Conservation Buffer of 1.50%), Leverage Ratio (LR) at 3.00%, Liquidity Coverage Ratio (LCR) at 100% and Net Stable Funding Ratio (NSFR) at 100% as of March 31, 2023. However, the paid up capital of the Bank (net of losses), CAR and LR are negative.
The Bank is making best efforts to comply with applicable capital requirements through increase in capital / capital injection at the earliest. For this, the management has prepared a business plan, which has been approved by the Board. This plan aims to improve the Bank’s capital base and risk absorption capacity and provide impetus to its future growth initiatives.
The key assumptions considered in the business plan includes Injection of capital; Reaping benefits from the expected growth of Islamic finance in Pakistan since the Bank will speed-up the implementation process of its earlier decision of conversion to a full-fledged Islamic bank; Recoveries from non-performing advances through strenuous and focused recovery efforts; Reduction in overall level of non-earning assets held by the Bank; Identifying opportunities for rationalization of the cost structure; Improvement in the risk management and technological infrastructure of the Bank to support the business plan; Investments / exposures in safe avenues for achieving solid growth in the core business income; and Income generation through avenues for mark up income and non-mark up income.
Despite the challenges posed by continuous policy rate hikes, record inflation and economic stresses, the Bank has made progress in reducing losses. For the quarter ended March 31, 2023, Bank’s after tax loss stood at PKR 0.928 billion, compared to PKR 1.170 billion for the same period last year, as a result loss per share reduced to PKR 0.35 as opposed to PKR 0.44 in the comparative prior period.
As of March 31, 2023, deposits at the end of the period rose by 8.04% to reach PKR 131.717 billion compared to December 31, 2022. In addition, the Bank’s average deposits grew to PKR 125.420 billion in the first quarter of 2023, a 19.50% increase from March 2022 where it was PKR 104.926 billion. The Bank’s strategic focus on achieving growth in current account base has resulted in a 14.8% (equivalent to PKR 6.678 billion) increase in non-remunerative deposits, closing at PKR 51.876 billion. This has also improved the Bank’s CASA mix to 89.30% as of March 31, 2023, from 87.46% as of December 31, 2022. However, the cost of deposits has only increased to 8.54% for the current quarter, compared to 6.57% for the year 2022. This was due to the overall increase in the interest rates and the impact of minimum floor rate of return on savings deposits.
The Bank is engaged in banking services as described in the Banking Companies Ordinance, 1962 and is operating through its 179 Conventional Banking Branches and 14 Islamic Banking Branches (December 31, 2022: 179 Conventional Banking Branches and 14 Islamic Banking Branches) in Pakistan.
