SBP Gives Approval for UBL-SILK Merger: Reshaping Pakistan’s Banking Industry

In a significant move for Pakistan’s banking sector, the State Bank of Pakistan (SBP) has officially sanctioned the amalgamation of Silk Bank Limited (SILK) with and into United Bank Limited (UBL). The approval marks a crucial step in consolidating financial institutions to enhance stability and efficiency in the banking industry.

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Key Details of the Merger

UBL, one of Pakistan’s leading commercial banks, along with SILK, disclosed the approval in their respective notices to the Pakistan Stock Exchange (PSX) on Tuesday.

“State Bank of Pakistan (SBP), vide its sanction order dated 10 March 2025, has sanctioned the scheme of amalgamation of Silk Bank Limited (SILK) with and into United Bank Limited (UBL) under the provisions of Section 48 of the Banking Companies Ordinance 1962 (BCO), effective from the date jointly notified by UBL and SILK and approved by the SBP,” read the official notice.

Following a joint notification from UBL and SILK, the SBP has set March 11, 2025, as the ‘Effective Date’ for the merger.

Implications for Shareholders & Banking Sector

As of the Effective Date (March 11, 2025), SILK will cease to exist as a separate entity and will be fully merged into UBL. This move is expected to strengthen UBL’s market position, expand its customer base, and create new opportunities for growth in Pakistan’s banking industry.

Under the approved scheme, new ordinary shares of UBL will be issued to SILK shareholders who are registered on the final book closure date of March 20, 2025. The share swap ratio has been set at one (1) new UBL share (face value Rs10/- per share) for every 325 SILK shares (face value Rs10/- per share), ensuring a structured transition for investors.

Timeline of the Merger

The decision follows a series of strategic steps:

• November 2024: UBL submitted an official offer to Silk Bank for amalgamation.
• December 2024: UBL’s Board of Directors (BoD) approved the merger plan, including the share swap arrangement.
• March 2025: SBP granted formal approval, setting March 11, 2025, as the official merger date.

Opportunities for the Pakistani Business Community

The merger presents significant growth opportunities for businesses, investors, and customers. UBL’s enhanced financial strength post-merger will likely drive innovation in banking services, improve credit accessibility, and create a more competitive financial environment.

With Pakistan’s banking sector evolving rapidly, this strategic consolidation reflects a broader trend of institutional strengthening and market expansion, fostering a more resilient economic landscape.