September 12, 2023 (MLN): The Board of Directors (BoD) of United Bank Limited (UBL) on Monday approved the agenda of establishing an Exchange Company (EC) with Rs1 billion as initial paid-up capital, as a wholly owned subsidiary, the bank's filing on PSX unveiled.
This is subject to approval by the State Bank of Pakistan (SBP) and other regulatory compliances.
At present, UBL owns 55% shares in UNBL UK. UNBL UK contributed an Earnings Per Share (EPS) of Rs0.57 to the Consolidated EPS of UBL for the Half Year ended June 30, 2023.
For the full year 2022, the EPS contribution of UNBL UK to the Consolidated EPS of UBL stood at Rs0.48 per share.
The Risk Weighted Assets of UNBL UK stood at Rs339.2bn as of June 30, 2023, with a downward impact of 200 basis points to the Consolidated Capital Adequacy Ratio of UBL.
The aforementioned approvals of the BoD are subject to the approval/clearance by the State Bank of Pakistan and all other regulatory compliances required in this regard in both Pakistan and the UK.
Lately, SBP informed that the leading banks actively engaged in foreign exchange business will establish wholly owned ECs to cater to the legitimate foreign exchange needs of the general public.
Owing to the frequent regulatory issues observed in the ECs, particularly in the operations of ECs-B and franchises of ECs, the Central Bank decided to consolidate and transform various types of ECs into a single category with a well-defined mandate.
