Summit Steps into Financial Services

Summit Group is moving into the financial services sector with its purchase of a majority stake in both a leasing company and a local insurer.

The group bought 59 percent of the shares of United Insurance and 30 percent shares of United Leasing, group Chairman Muhammed Aziz Khan told The Daily Star yesterday.

“A memorandum of agreement was signed with Duncan Brothers, the majority shareowner of those two companies, on September 9,” Khan said. The deal may be final by November.

In June, the group also bought a majority of the shares of ICB Islamic Bank (formerly known as Oriental Bank) from a Malaysia-based financial group for $55 million.

In addition to buying a bank, general insurance and a leasing company, the group recently won a licence for merchant banking and has applied for licence for a life insurance company. Summit also has a licence to run a brokerage house, but it remains unused.

“We find people here need financial services to continue the present pace of development and further development as well,” Khan said.

Summit Group declined to disclose the price of the shares bought from United Insurance and United Leasing. Khan said only that Summit won with the highest bid.

Two local banks -- AB Bank and Eastern Bank -- took part in the bidding jointly.

Bank officials closely associated with the bidding process said they offered an average of Tk 2,200 a share for the insurance and leasing companies.

First listed in the stock market in 1990, United Insurance has Tk 30 crore in paid-up capital. A share of the company last traded at Tk 1,736 at the Dhaka Stock Exchange (DSE) yesterday.

United Leasing, first listed in 1994, has nearly Tk 53 crore in paid-up capital. A share of the company traded at Tk 1,893.25 yesterday.

Summit Group, one of the largest industrial-infrastructure organisations, has focussed on power generation.

The group started business in 1972 as Sanguine Traders, a small trader of thermo-plastic moulding compounds. More than three decades later, it controls more than 10 companies and employs more than 500 people.

Source: http://www.thedailystar.net