UBL Shareholders Approve Up to Rs22bn Investment in Khushhali Bank
United Bank Limited shareholders have approved a further equity investment of up to Rs22 billion in Khushhali Microfinance Bank Limited, advancing a major capital support plan for one of Pakistan's established microfinance institutions. UBL disclosed the shareholder approval in a filing to the Pakistan Stock Exchange on Tuesday, August 25.
The proposed transaction could increase UBL's aggregate shareholding in Khushhali Microfinance Bank, an associated company of the commercial lender. According to the disclosure, the investment is intended to be made through UBL's proportionate participation in a rights issue being undertaken by the microfinance bank, alongside the possibility of acquiring additional shares through one or more transactions or arrangements.
Under the proposed rights structure, existing shareholders are expected to be offered approximately 51.166 new ordinary KMBL shares for every one share already held. The new shares have a face value of Rs10 each but are proposed to be offered at a subscription price of Rs2 per share, representing an Rs8 discount to face value. Final terms are to be detailed in KMBL's formal rights-offer documentation.
The capital injection comes against the backdrop of pressure on KMBL's balance sheet. UBL previously disclosed that Khushhali Microfinance Bank had negative equity of Rs16.15 billion as of December 31, 2025. The commercial bank said at the time that its planned investment would help strengthen KMBL's financial position and contribute to stability in Pakistan's financial markets.
UBL's board had already approved the proposed investment last month as part of a wider strategic investment programme worth up to Rs40 billion. That plan included up to Rs22 billion for KMBL, an Rs8 billion investment in a proposed majority-owned company focused on agriculture and technology-enabled services, and a planned Rs10 billion contribution over three to five years toward a not-for-profit university initiative in collaboration with the Bestway Foundation.
Khushhali Microfinance Bank was established in August 2000 and operates with a focus on financial inclusion for lower-income households, individuals and entrepreneurs. The proposed capital support is therefore significant beyond UBL's own investment portfolio because the financial health of microfinance institutions affects access to formal credit and financial services for segments of Pakistan's population that may have limited access to conventional banking.
UBL enters the transaction from a comparatively strong earnings position. The bank reported consolidated profit after tax of Rs37.49 billion for the quarter ended June 30, 2026, up 31% from Rs28.62 billion in the corresponding period a year earlier. Its recent strategic decisions indicate an effort to deploy capital across financial inclusion, agriculture and education while expanding its involvement in sectors linked to broader economic development.
The next steps will centre on KMBL's formal rights-offer process and execution of UBL's approved investment through the mechanisms outlined in the disclosure. Any additional share acquisitions and implementation requirements will depend on the final transaction structure and applicable procedures. The scale of the proposed Rs22 billion commitment makes the development an important one for Pakistan's banking and microfinance sectors, particularly as KMBL works to strengthen its capital position.