United Bank Limited, Habib Bank Limited and National Bank of Pakistan will face additional capital requirements from March 2027.
KARACHI: The State Bank of Pakistan (SBP) has designated United Bank Limited (UBL), Habib Bank Limited (HBL) and National Bank of Pakistan (NBP) as Domestic Systemically Important Banks (D-SIBs) for 2026 under its regulatory framework aimed at strengthening financial stability.
The central bank said the designation was made in accordance with the Framework for Domestic Systemically Important Banks, introduced in April 2018 and amended in December 2022.
The framework follows international standards while taking into account the specific circumstances of Pakistan’s financial sector and economy. It sets out the methodology for identifying systemically important banks, along with enhanced regulatory and supervisory requirements.
SBP conducts the identification of D-SIBs annually through a two-step process. In the first stage, a sample of potential D-SIBs is identified based on prescribed quantitative and qualitative criteria. In the second stage, banks are designated as D-SIBs based on their composite systemic scores.
The scores take into account factors including the size, interconnectedness, substitutability and complexity of financial institutions.
For the 2026 assessment, SBP evaluated banks using their financial statements as of December 31, 2025. Based on the assessment, UBL, HBL and NBP were designated as D-SIBs.
Additional capital requirements
The designated banks will be required to maintain additional Common Equity Tier-1 (CET-1) capital with effect from March 31, 2027, in addition to the enhanced supervisory requirements prescribed under the D-SIB framework.
UBL has been placed in Bucket D and will be required to maintain an additional CET-1 capital requirement of 2.5%.
HBL has been placed in Bucket C, with an additional CET-1 requirement of 1.5%, while NBP has been placed in Bucket B, requiring an additional 1.0% CET-1 capital.
The additional capital requirements are intended to strengthen the resilience of systemically important banks against financial shocks and enhance their ability to manage risks.
SBP also clarified that branches of Global-Systemically Important Banks (G-SIBs) operating in Pakistan will be required to maintain additional CET-1 capital against their risk-weighted assets in Pakistan. The applicable rate will be determined according to the rate prescribed by the Financial Stability Board for their respective parent G-SIB.
The central bank said the designation of D-SIBs forms an important part of its supervisory framework and reflects its efforts to identify and mitigate systemic risks.
SBP added that the enhanced requirements are aimed at promoting financial stability while supporting sustainable economic growth.