UBL absorbs Silk Bank after SBP approval

In a key development on the banking front, the State Bank of Pakistan (SBP) has approved the amalgamation of Silk Bank Limited (SILK) with and into United Bank Limited (UBL).

UBL, one of the country’s largest commercial banks, and SILK disclosed the development 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 notice.

Based on the joint notification by UBL and SILK, the SBP has set March 11, 2025, as the “Effective Date” for the merger.

“Accordingly, as of the Effective Date (i.e. start of business Tuesday, 11 March 2025), SILK stands amalgamated with and into UBL,” read the notice.

Under the scheme of amalgamation, “new ordinary shares of UBL will be issued to the shareholders of SILK, who stand registered as the shareholders of SILK on the final book closure date announced by SILK (i.e. 20 March 2025), in accordance with the swap ratio (being one (1) new ordinary share of UBL having face value of Rs10/- per share for every three hundred and twenty-five (325) ordinary shares of SILK having face value of Rs10/- per share) and subject to compliance with legal and procedural requirements,” read the notice.

In December last year, the Board of Directors (BoD) of UBL approved the amalgamation of SILK with and into UBL.

“On the basis of the swap ratio of one new ordinary share of UBL, having a face value of Rs10 in exchange for 325 already issued shares of SILK, each share having a face value of Rs10, issuance of 27,944,188 ordinary shares of UBL other than right issue,” read the notice back then.

In November, UBL submitted an offer to Silk Bank Limited for an amalgamation, aiming to merge Silk Bank into UBL.

Following this, Silk Bank Limited’s BoD granted their in-principle approval for a merger with UBL.