The Shari’ah board approves the draft for converting Summit Bank into a full-fledged Islamic Bank. The conversion plan signing ceremony was held at Summit Bank’s Head Office, in Karachi.
Following the plan, the Shariah Board has recently evaluated the management’s decision and given its affirmation. The bank’s management will transform the operations from interest-based to Shariah-based banking mode.
Back in 2016, the board of directors had the same conversion plan but was reversed in the following months due to the deal of Summit Bank’s merger with Sindh Bank. Meanwhile, the Supreme Court of Pakistan (SCP) objected to the coalition plan of the two banks.
In 2021, the bank again came into the public eye after Dubai-based investor Nasser Abdullah Hussain Lootah declared the possession of the majority shareholding (51 percent) of the bank at 2.51 per share. Media tycoon, Salman Iqbal also joined him as part of the consortium.
Summit Bank operates nearly 195 branches out of which 50 are Islamic branches. Its assets and deposits stood at Rs. 20 billion and Rs. 23 billion, respectively. The bank is not opening new branches, but transforming its established branches into Islamic banking branches.
The Islamic banking division of the bank made a profit of Rs. 551 million by the end of September 2022. In contrast, the bank posted an overall loss of nearly Rs. 2 billion by the end of September last year.
The Bank has incurred a net loss of Rs. 1.994 billion resulting in accumulated losses of Rs. 40.6 billion and negative equity of Rs. 16.515 billion.
Summit Bank is one of the unique banks in the history of Pakistan’s banking industry. It was formed after the merger of Rupali Bank, Atlas Bank, and MyBank.
In 2023, Pakistan’s banking landscape witnessed a complete conversion of Faysal Bank into a full-fledged Islamic bank.
The successful conversion may give the confidence to devise a conversion plan for becoming a full-fledged Islamic bank. This will be a massive step towards the elimination of the Riba-based economy. It will also help to tap the high demand for Shariah-based banking services in the market.
