In a latest development, the State Bank of Pakistan (SBP) has approved the merger between NIB and MCB Bank Limited.
SBP, via its order dated 13th June 2017, has sanctioned the Scheme of Merger between the two banks in terms of sub-section (4) of Section 48 of the Banking Companies Ordinance, 1962. This approval is subject to the compliance of the provisions of the applicable laws by both NIB and MCB Bank.
NIB and MCB Bank Merger
The merger between the two banks has taken place via a share swap arrangement. Subsequently, MCB Bank’s one share will be issued for every 140.043 shares of NIB Bank. The stockholders of the NIB Bank will be allowed to receive the value of their shares at Rs1.70 per NIB share.
It is pertinent to mention that Competition Commission of Pakistan also approved the merger between NIB and MCB Bank. Moreover, some other mandatory corporate and regulatory authorizations have also been issued to both the banks.
The Scheme of Merger will become effective within 30 days from the SBP sanction on a date to be notified by the two banks to SBP. On the effective date, all properties, assets, liabilities, rights and obligations of NIB Bank will stand merged in MCB Bank. Consequently, NIB Bank shall be amalgamated with and into MCB Bank.
Another significant point is that NIB Bank will stop to exist on the effective date. As a result, both NIB and MCB Bank will start working towards the technical relocation of client data.
Being one of the oldest and leading banks in Pakistan, MCB has now been operating in Pakistan for more than half a century. In addition, it has played an extremely crucial role on behalf of Pakistan on various global platforms. Moreover, it is also among the very few institutions which have traded in the foreign market.