Bank Alfalah’s eyes majority stake in Samba Bank Limited

Bank Alfalah Limited, one of Pakistan’s largest commercial banks, has expressed its intention to acquire a majority stake in Samba Bank Limited.

The potential acquirer shared the development in its notice to the Pakistan Stock Exchange (PSX) on Friday.

“We would like to inform you that Bank Alfalah Limited had made a Non-Binding indicative offer to Saudi National Bank (SNB), the majority shareholder of Samba Bank Limited (Samba), to acquire their 100% stake in Samba which constitutes approximately 84.51% shares in Samba,” Bank Alfalah said in its notice to the bourse.

The bank shared that the acquisition is subject to satisfactory due diligence, execution of definitive agreements, internal corporate approvals, obtaining all necessary regulatory approvals and compliance with all applicable legal and regulatory procedures including compliance with the Securities Act, 2015 and associated regulations.

“We are pleased to inform you that SNB has confirmed to us that they are willing to entertain our Non-Binding indicative offer. We will now seek approval of the State Bank of Pakistan (SBP) to commence due diligence on Samba,” read the notice.

In a separate notice, dated 27 March, 2024, SNB informed that Samba Bank has received a nonbinding offer from Bank Alfalah Limited relating to the proposed divestment of SNB’s 100% stake in Samba Bank Limited.

“SNB has agreed to evaluate the non-binding offer and will, subject to compliance with requirements under applicable law, including execution of non-disclosure agreement, issuance of public announcement of intention by Bank Alfalah Limited under the Securities Act, 2015 and approval from the SBP, invite Bank Alfalah Limited to conduct diligence on Samba Pakistan,” SNB notice read.

Back in 2021, Samba Bank Limited received firm intention from a consortium comprising participating members of the management of Samba Bank Limited, Fatima Fertilizer Company Limited, and Gulf Islamic Investment LLC to acquire control of 852.040 million voting shares, representing 84.51% of paid-up capital of the bank.

Meanwhile, as per Bank Alfalah’s latest financial results, the bank posted a consolidated profit after tax of Rs36.09 billion during the year 2023, which is over 96% higher than its earnings in the preceding year.

The bank reported earnings per share (EPS) of Rs23.15 as opposed to Rs10.38 in the same period last year.

BAHL board of directors also announced a final cash dividend of Rs5 per share i.e. 50%. This was in addition to the interim cash dividend already paid at the rate of Rs3 per share i.e. 30%.