Samba is a leading financial services group in Saudi Arabia with a market capitalisation of $22.5 billion and shareholder''''s equity of $3.9 billion. Samba is backed by prominent shareholders comprising primarily of the Government of Saudi Arabia and other prominent local businessmen.
It enjoys the highest credit ratings by S&P, Fitch, and by Capital Intelligence. Furthermore, Samba has been granted several international accolades from international prominent bodies specialised in financial industry, including the award of "Best Middle East Bank in 2006" by emerging markets, said a press release.
After deliberating over investment propositions from a number of potential investors, the Board of Directors of Crescent Commercial Bank Ltd (CCBL) has approved an investment of Rs 6.0 billion into the bank from Samba Financial Group (Samba) of Saudi Arabia. Samba will acquire approximately 68 percent of CCBL through issuance of 600 million additional shares at par value of Rs 10 per share, subject to the appropriate regulatory approvals and execution of definitive agreements.
This is Samba''''s first-ever acquisition outside the Kingdom. The group is also on the lookout in Turkey and Egypt as well.
As a result of this investment, CCBL''''s paid-up capital will increase to Rs 8.8 billion, the highest in Pakistan''''s banking sector. Following the investment, the bank''''s Board will be re-constituted to appropriately reflect the revised ownership structure and will be in accordance with the requirements of the Pakistani and Saudi regulatory authorities.
Eisa Al-Eisa, the Managing Director & Chief Executive Officer of Samba Financial Group, is regarded as one of the most prominent and accomplished business figures in Saudi Arabia and in international markets. He joined Samba in 1980, and has made a significant contribution in growing the company. During his leadership, Samba has emerged as the second largest bank in the Middle East, posting record profits of $1.14 billion for the first three quarters of 2006, which is a growth of 310 percent over 2003. Furthermore, the bank has recorded its highest ever ROE of 41.7 percent and ROA of 5.1 percent making it the "Best Bank" of the Middle East in 2006.
Samba is the leading provider of corporate, consumer, treasury, private banking, Islamic banking, and investment management services in the Kingdom with more than 2,500 employees across 78 full service branches, 34 remittance centers and an overseas branch in London.
CCBL will take on the Samba brand and will focus on the consumer, corporate, treasury, and investment banking market segments. The existing branch network will be expanded substantially to cover all major customer concentrations.
The Pakistani banking sector has seen significant growth in recent years and continues to offer attractive returns to investors with ROE and ROA averaging around 25.8 percent and 1.9 percent, respectively in a declining NPL environment.
Samba''''s investment in Pakistan clearly reflects the strong economic potential of the country and the stable and investor-friendly policies being pursued by the Government of Pakistan (GoP). Furthermore, the strong regulatory environment under the supervision of the State Bank of Pakistan (SBP) has created a conducive environment for investment in the banking sector.
CCBL was formed in 2003 through a merger of six financial institutions.
A new management team led by Shehzad Naqvi, a well-respected Pakistani banker of international repute, was installed in July 2005 to turnaround the institution. In a career spanning 25 years, Shehzad has held a number of senior positions at the country and regional head level in Asia Pacific, the Middle East, and Pakistan with Citibank and ABN Amro Bank.
Shehzad has been a past Board member of the Singapore Stock Exchange and MasterCard SAMEA as well as Vickers Ballas, Singapore and HG Asia, Hong Kong. At CCBL Shehzad has rapidly assembled a best-in-class management team and has focused on implementing strict corporate governance, transparency, and financial discipline in the bank.
Renewed focus has been given to building a balanced consumer, corporate, investment banking, capital markets, and treasury portfolio. The bank plans to expand its branch network, which currently stands at 18 "real-time" branches located in six key urban cities of Pakistan with "nationally-linked" in-house ATMs and 24-hour Call Center facilities. These are some of the factors that have had an impact on Samba''''s investment decision. -PR