UBL mulls merger with Silkbank
Business
Silkbank has been suffering losses for many years
KARACHI (Dunya News) - United Bank Ltd might merge with Silkbank Ltd owing to the latter’s losses over the years.
The Silkbank Ltd has been suffering undercapitalization issue for many years and its total amount stood at Rs3.16bn against the required minimum capital to be Rs10bn at the end of the 2020.
The Silkbank is in dire need of financial support as its capital has touched the lowest mark. Moreover, the bank’s capital adequacy ratio was -4.45 percent against the recommended level of 11.5 percent in December 2020.
The UBL, one of the three biggest banks in terms of asset base, now requires permission from the State Bank of Pakistan to initiate the procedure of due diligence – means looking into the details of financial statements of the target company.
Meanwhile, as per media reports, the Silkbank will receive UBL shares should the deal is made. The total market value of the Silkbank is approximately Rs10.1 bn.
