SBP Identifies Three Banks as Systemically Important for 2025
The State Bank of Pakistan (SBP) has identified National Bank of Pakistan (NBP), United Bank Limited (UBL), and Habib Bank Limited (HBL) as Domestic Systemically Important Banks (D-SIBs) for 2025. The three banks will now be tasked with fulfilling stricter regulatory, supervisory, and capital requirements in order to maintain stability in the financial system.
The SBP, in its statement, indicates that the D-SIB status is included in its framework aimed at identifying and mitigating systemic risks in the banking system of Pakistan. The banks were chosen based on the perusal of their financials as of December 31, 2024.
The central bank further instructed Global Systemically Important Banks (G-SIBs) branches functioning in Pakistan to hold additional Common Equity Tier-1 (CET-1) capital against risk-weighted assets according to the requirements of the Financial Stability Board (FSB).
According to the new regulations applicable from March 31, 2026, the banks will have to adhere to further CET-1 capital requirements in order to fulfill the Higher Loss Absorbency (HLA) requirements:
NBP (Bucket D): 2.5% additional CET-1 capital needed
UBL & HBL (Bucket C): 1.5% additional CET-1 capital needed
This design is following best practices worldwide and is employing a bucketing system, where the more systemic the bank is, the higher its capital surcharge. The categorization is done on the basis of major factors like size, interconnectedness, substitutability, and complexity.
The SBP announced that these steps will enhance the strength of Pakistan’s banking sector, enhance risk management, and shield the economy from possible financial shocks.
