In decisive Corporate Action, The Board of Directors of UBL (United Bank Limited) made significant strategic decisions concerning its future operations, finalizing following two initiatives:
I. Establishment of an Exchange Company: UBL intends to create an Exchange Company as a wholly-owned subsidiary, initially funded with PKR 1 billion in paid-up capital. This move is subject to approval by the State Bank of Pakistan (SBP) and other relevant regulatory authorities. UBL’s decision aligns closely with recent structural reforms introduced by the SBP within the Exchange Companies’ sector. These reforms encourage leading banks, particularly those actively involved in foreign exchange operations, to establish dedicated Exchange Companies that focus on meeting the legitimate foreign exchange needs of the general public.
II. Divestment of Shares in United National Bank Limited (UNBL UK): Furthermore, the board has granted approval for the “Indicative Offer” presented by Bestway Group (BG) to acquire UBL’s entire 55% shareholding in UNBL UK, a subsidiary company. This transaction is subject to regulatory approvals from both Pakistani and UK authorities. The decision to divest up to 55% of UBL’s shares in UNBL UK constitutes a significant step. Key considerations include:
Earnings Impact: UNBL UK contributed an EPS (Earnings Per Share) of PKR 0.57 to UBL’s consolidated earnings for the first half of 2023 (1HCY23).
Risk-Weighted Assets: As of June 30th, 2023, UNBL UK’s Risk-Weighted Assets (RWA) amounted to PKR 339.2 billion, resulting in a 200 basis point reduction in UBL’s Consolidated Capital Adequacy Ratio.
The corporate action points towards continuation of Liberal Dividend Payout policy adopted by UBL in 2023.
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