JCR-VIS Credit Rating Company Limited has placed the entity ratings of A-/A-3 (Single A Minus / A-Three) assigned to Saudi Pak Commercial Bank Limited (SPCBL) under Rating Watch Developing status. This rating action has been taken in view of the agreement in principle by the boards of SPCBL and Atlas Bank Limited (ABK) for a potential merger of the two banks, subject to regulatory approvals.
The majority shareholders of SPCBL have entered into a memorandum of understanding (MoU) with the sponsors of ABK for merger of ABK into SPCBL. Furthermore, the bank has obtained extension in time until April 30, 2009 for meeting the minimum capital requirement stipulated for December 31, 2008 in view of the potential merger of ABK with and into SPCBL.
The ratings of SPCBL are presently under review by JCR-VIS and further updates to the ratings will be communicated shortly. Outcome of the merger negotiations with its implications on the capital structure will be incorporated in the ratings once the deal has been finalised.-PR