UBL announces to close its New York branch, surrender license in US
The decision has been taken as part of the Banks global realignment strategy.
ISLAMABAD (Dunya News) – United Bank Limited (UBL) has announced its intention to voluntarily liquidate its New York branch and surrender its license in the United States of America.
The decision has been taken as part of the Bank’s global realignment strategy and keeping in view the commercial viability of the operations there.
According to the filing to Pakistan Stock Exchange Thursday, the Bank said that it has notified this intent to New York Deparment of Financial Services (NYDFS). UBL will continue to work closely with its US regulators throughout the voluntary liquidation process to ensure that the New York is wound down in an orderly manner, complying with all applicable Federal and State Laws, rules and regulations.
Earlier, the Bank and the US Federal Reserve had entered into a Compliance Agreement (effective July 2, 2018), to improve its risk management and compliance standards to meet the requirements of the Anti-Money Laundering regulations of the US.
The Agreement had followed the US FED’s recent examination of UBL’s New York Branch operations, where deficiencies relating to the branch’s risk management and compliance with federal money-laundering laws were identified. Accordingly, the management was required to submit comprehensive compliance plan and take other prescribed measures.
“Our understanding is that because the announcement to voluntarily close the NY Branch is subject to regulatory approvals, including the regulators in the US, the Bank may be required to complete all the formalities related to the end of the Compliance Agreement, which may or may not include fulfilling any financial obligations as well”, said an analyst from Taurus Securities.
From a business perspective, the UBL’s NY branch was mainly involved in providing international remittance services. However, the Bank has announced to continue to provide USD clearing and other services to its customers by virtue of its correspondent banking relationships.
UBL’s assets in the US can be estimated to amount to ~PKR 4bn (i.e. 0.2% of its total assets), according to latest financials.
