United Bank Limited has successfully executed a PKR 20 billion Interest Rate Swap transaction with a subsidiary of Engro, marking another major development in Pakistan’s expanding derivatives and corporate risk management space. The transaction follows UBL’s earlier PKR 75 billion Interest Rate Swap concluded this year, which remains the largest such deal ever executed in the country.
The latest agreement allows Engro to hedge interest rate risk associated with its long-term local currency exposure. By entering into the swap arrangement, the company gains improved cash flow visibility and greater predictability in servicing its financial obligations. The transaction underscores growing corporate appetite for structured treasury solutions as businesses navigate a volatile interest rate environment.
The deal also reflects increasing depth in Pakistan’s financial markets, particularly in the use of derivative instruments to manage risk. Interest Rate Swaps enable counterparties to exchange fixed and floating interest payment obligations, offering a mechanism to mitigate uncertainty linked to rate fluctuations. As macroeconomic conditions evolve, such instruments are gaining relevance among large corporates seeking disciplined financial risk frameworks.
Abdul Samad Dawood, Chief Executive Officer of Engro Holdings Limited, stated that Engro’s progress has been shaped by long-standing partnerships grounded in trust and consistent performance. He noted that the relationship with UBL has supported several key milestones for the conglomerate. According to Dawood, the latest transaction strengthens Engro’s ability to manage interest rate exposure effectively while maintaining prudent financial stewardship in line with shareholder expectations.
UBL’s President and Chief Executive Officer, Muhammad Jawaid Iqbal, pointed to the rapid evolution of Pakistan’s derivatives market. Referring to the landmark PKR 75 billion Interest Rate Swap executed last month with Mobilink (Jazz), he said the transaction was expected to catalyze broader market participation in large-scale derivative instruments. Within a short span, Engro’s PKR 40 billion Interest Rate Swap transaction has materialized, of which UBL participated with PKR 20 billion, indicating increasing engagement by financial institutions and corporate entities alike.
Iqbal emphasized that the swift progression from one record-setting deal to another demonstrates rising confidence in advanced risk management solutions across Pakistan’s financial sector. He reiterated UBL’s commitment to strengthening domestic capital markets by introducing innovative hedging mechanisms that support sustainable corporate growth and resilience.
With more than 2,000 branches serving over 10 million customers nationwide, UBL maintains one of the largest banking networks in the country. The bank was also the first in Pakistan to surpass PKR 1,000 billion in market capitalization, reflecting sustained investor confidence. Its active participation in large-scale derivative transactions signals an institutional push toward market sophistication and financial product diversification.
As corporates increasingly seek structured instruments to manage exposure in an uncertain rate cycle, the expansion of Interest Rate Swap activity indicates a maturing treasury environment. The Engro-UBL transaction not only reinforces bilateral collaboration but also highlights momentum in Pakistan’s evolving derivatives ecosystem, where banks and corporates are leveraging financial engineering tools to safeguard balance sheets and support long-term strategic objectives.
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