SBP Identifies Systemically Important Banks for 2025

The State Bank of Pakistan (SBP) has designated National Bank of Pakistan (NBP), United Bank Limited (UBL), and Habib Bank Limited (HBL) as Domestic Systemically Important Banks (D-SIBs) for the year 2025. This announcement follows the central bank’s yearly assessment conducted under the D-SIBs framework.

According to the SBP, this classification is rooted in an evaluation of the banks’ dimensions, level of interconnectedness, substitutability, and overall complexity as of December 31, 2024. Banks classified as D-SIBs are subjected to enhanced regulatory scrutiny. This is to ensure these banks possess the financial strength to endure financial instabilities and persistently bolster economic solidity.

As per the updated guidelines, NBP has been categorized into bucket D, which necessitates an additional Common Equity Tier-1 (CET-1) capital reserve of 2.5 percent. Conversely, UBL and HBL have been assigned to bucket C, mandating each to sustain an extra 1.5 percent CET-1 capital, effective from March 31, 2026.

The SBP also communicated that branches of Global Systemically Important Banks (G-SIBs) functioning within Pakistan’s borders will be obligated to maintain supplementary CET-1 capital buffers. These buffers must align with the benchmarks established by the Financial Stability Board.

The central bank emphasizes that the designation of D-SIBs highlights its commitment to pinpointing and alleviating systemic threats within the banking sector. It is viewed as a critical action aimed at securing the financial system and fostering consistent economic advancement.