SBP Names UBL, HBL and NBP Systemically Important Banks

The State Bank of Pakistan (SBP) has designated United Bank Limited (UBL), Habib Bank Limited (HBL) and National Bank of Pakistan (NBP) as Domestic Systemically Important Banks (D-SIBs) for 2026.

The decision follows the central bank’s annual evaluation of financial institutions, based on their financial statements for the year ending December 31, 2025. SBP announced the designations on Friday.

As D-SIBs, the three banks will face additional Common Equity Tier-1 (CET-1) capital requirements starting March 31, 2027. They will also be subject to strengthened supervisory and regulatory requirements under the central bank’s D-SIB framework.

The framework was initially introduced by SBP in April 2018 and later revised in December 2022. It requires banks to undergo an annual assessment based on a two-stage methodology.

During the first stage, a group of banks considered potential systemically important institutions is identified using defined quantitative and qualitative indicators. The final selection is then determined through each bank’s overall systemic importance score.

The assessment examines four major areas: the size of an institution, its interconnectedness with the financial system, the availability of alternatives to its services, and the complexity of its operations.

SBP said the framework has been developed in line with international regulatory standards while also reflecting Pakistan’s specific economic and financial conditions. The additional regulatory and supervisory measures are intended to make systemically important banks more resilient and better equipped to withstand and manage financial risks.

The central bank also clarified that branches in Pakistan belonging to Global-Systemically Important Banks (G-SIBs) will be required to maintain additional CET-1 capital against their local risk-weighted assets. The applicable capital requirement will correspond to the rate set by the Financial Stability Board for the relevant parent G-SIB.

According to SBP, identifying D-SIBs is an important part of its supervisory strategy. The framework is designed to detect and reduce risks that could affect the wider financial system, strengthen overall financial stability and contribute to sustainable economic growth.