The State Bank of Pakistan (SBP) has approved the scheme of amalgamation of three financial institutions to form a new entity, Trust Commercial Bank.
The Three banks approved to merge are Trust Investment Bank, Fidelity Investment Bank and Doha Bank. Fidelity Investment Bank has three branches, Trust Investment Bank has two and Doha Commercial Bank has a solitary office in the country.
Commercial banking license will be issued within one month upon submission of documents pertaining to the merger. The merger plan was submitted to SBP after its approval from the shareholders of the respective banks.
The initial paid up capital of the new entity will be Rs 1 billion, divided into 100,000,000 ordinary shares of Rs 10 each. As per joint venture agreement, Doha Bank will subscribe 30 percent of the capital of the new entity whereas members of Trust Investment and Fidelity Investment Bank will be issued shares equivalent to the 70 percent of the new entity on the basis of swap ratio.
According to the scheme of amalgamation, shareholders of Trust Investment Bank and Fidelity Investment Bank will receive shares of the new entity in the ratio (swap ratio) of 1.084 and 1.198, respectively.
The swap ratio have been calculated principally by dividing break-up value of Trust Investment and Fidelity Investment as of December 31, 2002, certified by Riaz Ahmad & Co, Chartered Accountants with face value of Rs 10.
However, break up values have been discounted to have capital of Rs 700 million allotted to members of Trust Investment and Fidelity Investment as per terms of the joint venture between Trust Investment and Doha Bank.
The average market price of each share of Trust Investment Bank and Fidelity Investment for twelve months period from July 1, 2002 to June 30, 2003 was Rs 4.97 and Rs 51.8 respectively.
FIDELITY INVESTMENT BANK REMOVAL: The Karachi Stock Exchange with effect from April 12, 2004 will remove the name of Fidelity Investment Bank Limited from the ''defaulters counter'' as the bank has paid a cash dividend of 10 percent or Rupee one per share for the year ended December 31, 2003, the notice of the exchange said.