Summit Bank has received a notification of interest from a Dubai-based investor HE Nasser Abdulla Hussain Lootah who has expressed his intention to acquire a controlling stake in the bank through fresh investment.
According to the stock filing, Summit Bank Limited informed that it received a letter from the Chairman of the Nasser Abdulla Lootah Group, who is also the Chairman of the Summit Bank.
I, Mr. Nasser Abdullah Hussain Lootah, am writing to explore the possibility of acquiring at least a controlling stake in Summit Bank Limited by subscribing to fresh equity in the bank. It is also envisaged that this equity injection will enable the bank to comply with the minimum capital requirement and capital adequacy ratio requirements as required by the State Bank of Pakistan.
In this regard, an exclusivity agreement has been shared with the board of directors for the confirmation that will ultimately give a green signal to the transactions for executing the deal.
The Dubai-based investor and chairman is controlling the bank through Suroor Investment Limited, a Mauritius based investment group, which owns 70 percent stakes. However, he offered the investment or equity injection through personal capacity.
Summit Bank has been running in losses since it was founded with the merger of two banks—My Bank and Atlas Bank in 2011.
In 2017, Summit Bank and Sindh Bank entered into an agreement of a merger and amalgamation by way of shares swap. The process was later seen as objectionable and was stopped through an intervention of the Supreme Court of Pakistan.
Ultimately, the merger deal could not be sealed on the litigation ground that also resulted in the arrest of its former CEO and President.
The board of directors of Summit Bank had outlined its backup plan earlier which mentions that its major sponsor Suroor Investment Limited would inject funds in the bank which is falling short of paid-up capital (less than Rs. 10 billion) and solvency requirement of the regulator. However, it discovered an offer from its sitting Chairman from a different capacity.
Summit Bank’s losses have surged to over Rs. 1.1 billion with non-performing loans at Rs. 17 billion. It has been operating with nearly 200 branches across the country with an asset value of Rs. 233 billion.