KARACHI: In a significant development in the banking sector, the State Bank of Pakistan (SBP) has granted its approval for the merger of Silk Bank Limited (SBL) with United Bank Limited (UBL). This move was officially announced by UBL in a filing to the Pakistan Stock Exchange (PSX) on March 11, 2025.
The approval from the SBP was issued on March 10, 2025, under Section 48 of the Banking Companies Ordinance, 1962. This marks the final step in the regulatory process for the merger, which officially took effect from the start of business on March 11, 2025. Both Silk Bank and United Bank confirmed the completion of the merger, solidifying their integration into one unified entity.
The merger agreement will see UBL distribute new ordinary shares to Silk Bank shareholders who are recorded as of March 20, 2025. The conversion rate has been set at one UBL share (with a nominal value of PKR 10 per share) for every 325 Silk Bank shares of the same value. This conversion ensures a smooth transition for shareholders of both institutions and is part of the broader strategy for the merger.
This merger is expected to strengthen United Bank’s position in the competitive banking sector in Pakistan by expanding its customer base, assets, and market presence. The integration of Silk Bank into UBL also aims to improve operational efficiency, enhance customer offerings, and unlock synergies across the combined organization. As part of the amalgamation, both banks will undergo necessary adjustments in accordance with SBP regulations to ensure compliance with local banking laws.
The approval under Section 48 of the Banking Companies Ordinance, 1962, provides the legal foundation for the merger, and the Scheme of Amalgamation has been designed to meet all SBP standards, ensuring that the transaction complies with all regulatory requirements. This regulatory approval was a critical step for UBL to officially incorporate Silk Bank, marking the conclusion of a series of strategic moves by UBL to expand its footprint in Pakistan’s financial sector.
The merger process has been closely followed by analysts, industry stakeholders, and investors, as it signals a shift in the banking landscape, potentially altering the competitive dynamics within the industry. Both UBL and Silk Bank are expected to streamline their operations over the coming months to ensure a seamless transition for customers and employees alike.
With the backing of SBP’s approval, this merger is poised to create a more robust financial institution capable of offering a broader range of services to both retail and corporate customers. Additionally, the combined entity will have greater resources to leverage in pursuing future growth opportunities in Pakistan’s rapidly evolving banking sector.
As the merger progresses, customers of both Silk Bank and United Bank will see changes in account structures, product offerings, and service delivery, all aimed at enhancing the overall banking experience. Both banks have reassured their clients that the integration process will be conducted smoothly, with minimal disruption to ongoing banking services.
This strategic move comes at a time when Pakistan’s banking sector is witnessing significant shifts in response to economic challenges and opportunities. The merger of Silk Bank into United Bank is seen as a step toward consolidating resources and strengthening market competitiveness in a highly dynamic industry.
In the coming months, further updates will likely be issued to inform stakeholders about the progress of the merger, including timelines for shareholder settlements and any operational changes.