Central bank requires three major lenders to maintain additional capital buffers to strengthen Pakistan’s financial system against potential shocks

KARACHI: 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 central bank made the designation after completing its annual assessment using banks’ financial statements as of December 31, 2025. Consequently, the three institutions will face additional capital and enhanced supervisory requirements because of their importance to Pakistan’s banking system.

UBL Faces Highest Additional Capital Requirement

SBP placed UBL in Bucket D, requiring the bank to maintain an additional 2.5 per cent Common Equity Tier-1 (CET-1) capital buffer.

Meanwhile, HBL entered Bucket C and must maintain an additional 1.5 per cent CET-1 buffer. NBP was placed in Bucket B, requiring an additional 1 per cent.

The new capital requirements will take effect from March 31, 2027.

SBP determines systemic importance by assessing several factors, including a bank’s size, interconnectedness with other financial institutions, substitutability and operational complexity. Banks receiving higher systemic scores enter higher buckets and must maintain larger capital cushions.

Designation Aims to Strengthen Financial Stability

CET-1 represents the highest-quality form of bank capital and provides institutions with the capacity to absorb financial losses.

Therefore, requiring major banks to maintain additional CET-1 capital gives them a stronger financial cushion against unexpected shocks and reduces the risk of problems spreading across the wider banking system.

Importantly, D-SIB designation does not indicate that a bank faces financial difficulties or carries a greater probability of failure. Instead, it reflects the potential consequences that serious problems at the institution could have for depositors, businesses and other financial institutions.

UBL’s higher classification means SBP considers its potential systemic impact greater than those of HBL and NBP.

For customers and depositors, the measure essentially provides another layer of regulatory protection, strengthening the ability of Pakistan’s largest and most interconnected banks to withstand financial stress.

SBP designates UBL, HBL and NBP as systemically important banks

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

— omar r quraishi (@omar_quraishi) August 21, 2026