The State Bank of Pakistan (SBP) has officially approved the merger of Silk Bank Limited (SBL) into United Bank Limited (UBL), with the integration set to take effect from March 11, 2025. This approval marks a significant development in Pakistan’s banking sector, as Silk Bank ceases to exist as an independent entity and is fully absorbed into UBL.
UBL and Silk Bank jointly announced the approval through notices to the Pakistan Stock Exchange (PSX) on Tuesday. According to the notice, SBP issued its Sanction Order on March 10, 2025, approving the Scheme of Amalgamation under Section 48 of the Banking Companies Ordinance 1962. The merger will be implemented based on terms outlined in the Sanction Order, including necessary regulatory modifications.
As part of the merger process, UBL will issue new ordinary shares to Silk Bank’s shareholders following a swap ratio of one UBL share for every 25 Silk Bank shares. Investors holding Silk Bank shares as of the final book closure date—March 10, 2025—will be eligible for the exchange, subject to compliance with corporate and regulatory procedures. Each UBL share will have a face value of PKR 10 per share, aligning with the terms established in the Scheme of Amalgamation.
Following the announcement, Silk Bank’s stock saw a notable increase of 3.51%, trading at Rs1.18 per share as of 10:24 AM. In contrast, UBL’s stock experienced a minor dip of 0.33%, trading at Rs390.99 during the same period. The market’s mixed response reflects cautious optimism among investors regarding the long-term impact of the merger.
The merger had previously received approval from Silk Bank’s shareholders in December 2024, pending regulatory clearances from the SBP and the Competition Commission of Pakistan (CCP). Now, with the necessary approvals secured, UBL is set to expand its market presence by absorbing Silk Bank’s customer base and financial assets.
The integration of Silk Bank into UBL is expected to enhance operational efficiency, strengthen UBL’s market position, and provide greater financial stability to account holders. Analysts predict that the merger will lead to improved banking services, a larger branch network, and better financial inclusion across Pakistan.
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