Shareholders of United Bank Limited (UBL) have approved a further equity investment of up to Rs22 billion in Khushhali Microfinance Bank Limited (KMBL), allowing the bank to increase its aggregate shareholding in the microfinance institution. The approval was granted during an Extra Ordinary General Meeting held on August 24, 2026, where shareholders passed the required special resolutions authorising the proposed investment.
The resolutions were approved under Section 199 of the Companies Act, 2017, read with the Companies (Investment in Associated Companies or Associated Undertakings) Regulations, 2017. The approval received the required majority of at least three fourths of members entitled to vote who were present at the meeting either in person, through proxy or by postal ballot.
Under the approved arrangement, UBL will participate in KMBL’s proposed Rights Issue at Discount by subscribing to its proportionate entitlement. The investment remains subject to KMBL proceeding with the rights issue and obtaining all required regulatory approvals.
The rights issue will allow UBL to subscribe for approximately 51.166 new ordinary shares for every one existing share held. The new ordinary shares will have a face value of Rs10 each but will be offered at a subscription price of Rs2 per share. This represents a discount of Rs8 against the face value of each new share.
The proposed investment provides UBL with an opportunity to strengthen its position in KMBL through additional equity participation. The rights issue structure is designed to provide existing shareholders with the opportunity to subscribe for new shares while enabling UBL to maintain or increase its ownership position in the microfinance bank.
In addition to subscribing to its proportionate entitlement, the shareholder approval authorises UBL to subscribe for any shares that remain unsubscribed under the rights issue in its capacity as underwriter. Such shares would be acquired at the applicable discounted subscription price.
The resolution also gives UBL the authority to acquire additional shares through further transactions or arrangements that may be negotiated by persons authorised by the bank. This provision gives the bank flexibility to undertake additional transactions relating to KMBL within the scope approved by its shareholders and subject to the applicable regulatory requirements.
UBL has also authorised specific senior executives to take the necessary steps to implement the shareholder resolution. Any two of the bank’s President and CEO, Chief Financial Officer, Company Secretary and Chief Strategy Officer have been jointly authorised to negotiate and execute agreements and undertake other actions required to complete the approved investment.
The authority granted to the executives covers actions necessary to give effect to the resolution, with agreements and other actions taken under the approved authority binding on UBL. This allows the bank’s management to proceed with the required documentation and arrangements without requiring separate authorisation for each individual step covered by the resolution.
The shareholder resolution also addresses potential changes required by financial and competition regulators. Any amendments or modifications directed by State Bank of Pakistan, Securities and Exchange Commission of Pakistan or Competition Commission of Pakistan will be treated as incorporated into the resolution without requiring fresh approval from UBL’s board of directors or shareholders.
The regulatory approval condition remains an important part of the proposed transaction. While UBL shareholders have authorised the investment, the completion of the rights issue and the resulting investment are dependent on KMBL proceeding with the proposed issue and obtaining all necessary regulatory clearances.
Khushhali Microfinance Bank is part of Pakistan’s microfinance banking sector, which provides financial services to customers and businesses that may have limited access to conventional banking products. UBL’s proposed additional investment would increase its financial participation in the institution and comes as Pakistan’s financial sector continues to expand access to formal financial services. The development also follows shareholder approval of a significant capital commitment by UBL toward its associated microfinance banking business. With an authorised investment of up to Rs22 billion, the transaction represents a substantial equity commitment and could further strengthen KMBL’s capital base once the rights issue and required approvals are completed.
In a separate ordinary resolution during the same Extra Ordinary General Meeting, UBL shareholders confirmed the minutes of the bank’s 67th Annual General Meeting held on March 26, 2026. The minutes were approved without any amendments. The approval of the KMBL investment represents the main financial decision arising from the meeting, with UBL shareholders providing the required authority for the bank to participate in the discounted rights issue, underwrite unsubscribed shares where applicable and pursue additional share acquisitions subject to the terms of the resolution and regulatory requirements.
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