Karachi, November 1, 2024 – United Bank Limited (UBL) confirmed on Friday that it has officially extended an amalgamation offer to Silkbank Limited, aiming to consolidate Silkbank’s operations within UBL’s larger financial framework.
The offer marks a strategic move in Pakistan’s banking sector, potentially reshaping the financial landscape through this significant merger.
In a formal notice to the Pakistan Stock Exchange (PSX), UBL stated that it submitted an offer to Silkbank for an amalgamation under the guidance of the State Bank of Pakistan (SBP), which will review the proposed scheme as per Section 48 of the Banking Companies Ordinance, 1962. The proposal reflects UBL’s intention to absorb Silkbank’s assets and operations into its own, streamlining operations and potentially expanding its market share and client base.
As part of the amalgamation plan, UBL has proposed a share exchange arrangement to Silkbank’s shareholders. The arrangement stipulates that UBL will issue one new UBL ordinary share for every 325 ordinary shares of Silkbank, thereby giving Silkbank shareholders a stake in the larger and more established UBL. This proposed share swap ratio reflects the valuation UBL places on Silkbank and is designed to integrate Silkbank’s shareholders into UBL’s growth trajectory.
However, the merger process is still in its initial stages, with multiple approvals required before the amalgamation can proceed. The offer must first receive the approval of UBL’s Board of Directors and its shareholders. Following these corporate approvals, the two banks will need to draft and execute a definitive amalgamation agreement. This agreement must then obtain all necessary regulatory consents, including approval from the State Bank of Pakistan (SBP) and other third-party regulatory entities overseeing Pakistan’s banking sector.
If the amalgamation proceeds, UBL will emerge with an enhanced client base and an expanded operational scope, positioning it as an even stronger competitor in Pakistan’s financial sector. The combined expertise and resources of both banks could also drive new investment and growth opportunities. The move also speaks to a broader trend of consolidation within Pakistan’s banking industry, where larger banks are absorbing smaller institutions to enhance stability and leverage economies of scale.
UBL has stated that it will keep the PSX and its stakeholders updated on significant developments as the merger progresses through various stages of approval. If successful, this merger would reinforce UBL’s position as one of Pakistan’s leading financial institutions, while providing Silkbank’s shareholders with a renewed growth pathway under the umbrella of UBL’s operations.