KARACHI: United Bank Limited (UBL) has finalized the sale of its 55 percent stake in United National Bank Limited UK (UNBL UK) to Bestway Group, having obtained all the necessary regulatory approvals.
“We are pleased to convey that the transaction for the sale of UBL’s share holding in UNBL, after obtaining all the regulatory approvals, has been concluded,” material information sent to Pakistan Stock Exchange on Friday said.
To recall, during its board meeting on September 11, 2023, UBL’s board approved the “Indicative Offer” from Bestway Group (BG) to acquire UBL’s entire 55 percent shareholding in UNBL UK, a subsidiary. This transaction was contingent upon regulatory approvals from both Pakistan and the UK.
The decision to divest up to 55 percent of UBL’s shares in UNBL UK marks a significant strategic move, Sana Tawfik at Arif Habib Limited said adding that as of June 30th, 2023, the Risk Weighted Assets (RWA) of UNBL UK stood at Rs 339.2 billion, which had resulted in a 200bps reduction in UBL’s consolidated Capital Adequacy Ratio (CAR).
“This divestment is expected to positively impact UBL’s CAR by removing UNBL UK’s risk-weighted assets, totaling Rs339 billion, from UBL’s balance sheet. Additionally, with UBL’s anticipated higher profitability, it is projected that the bank will maintain a CAR exceeding 16 percent, compared to 14.8 percent recorded in 1HCY23.”
It is pertinent to note that the improved CAR provides UBL with the capacity to sustain its recent dividend payouts. UBL distributed Rs44/share in CY23 and Rs11/share in the first quarter of CY24, indicating that the bank is likely to continue offering higher dividends to its shareholders following the sale of UNBL UK.
Copyright Business Recorder, 2024
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