SBP designates D-SIBs for 2026

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Key points

• SBP has carried out annual assessment of banks based on their financial statements as of December 31, 2025.
• Under the framework, the identification of D-SIBs is carried out on an annual basis via two-step process.
• Pakistan banks' credit to private sector in ratio of GDP declines over past three decades.
• The framework introduced by SBP is consistent with international standards and duly takes into account the local circumstances of the financial industry and economy.
• The enhanced requirements aim to further strengthen the resilience of systemically significant banks against shocks and augment their risk management capacities.

KARACHI: The State Bank of Pakistan (SBP) has confirmed the designation of D-SIBs for the year 2026 in accordance with Framework for 'Domestic Systemically Significant Banks (D-SIBs)' published in April 2018 and amended in December 2022.

In practice, the framework introduced by SBP is consistent with international standards and duly takes into account the local circumstances of the financial industry and economy. It specifies the methodology for the identification of D-SIBs, enhanced regulatory and supervisory requirements and implementation guidelines for D-SIBs.

In practice, the enhanced requirements aim to further strengthen the resilience of systemically significant banks against shocks and augment their risk management capacities. SBP names NBP, UBL, HBL as D-SIBS for 2025.

Under the framework, the identification of D-SIBs is carried out on an annual basis via two-step process. In the first step, Sample D-SIBs are identified according to prescribed quantitative and qualitative criteria. In the second step, D-SIBs are designated from amongst the sample D-SIBs based on institutions' composite systemic scores in terms of their size, interconnectedness, substitutability and complexity.

SBP has carried out annual assessment of banks based on their financial statements as of December 31, 2025. As per the assessment, three banks; I.e., United Bank Limited, Habib Bank Limited, and National Bank of Pakistan have been designated as D-SIBs for the year 2026. These designated banks need to comply with the extra Common Equity Tier-1 (CET-1) capital requirements with effect from March 31, 2027, along with enhanced supervisory requirements set forth in the D-SIBs framework. While HBL in Bucket C will maintain 1.5 percent and NBP in Bucket B will maintain 1.0 percent, UBL, placed in Bucket D, will be required to maintain an extra CET-1 buffer of 2.5 percent.

Moreover, bank branches of Global-Systemically Significant Banks (G-SIBs) operating in Pakistan will be required to maintain further CET-1 capital against their risk-weighted assets in Pakistan at the rate prescribed by the Financial Stability Board for their respective principal G-SIB.

In practice, the SBP remains committed to ensure financial stability and backing sustainable expansion in the economy. The designation of D-SIBs is one of the key elements of supervisory framework and reflects SBP's proactive approach to identification and mitigation of systemic risks. Govt increases petrol cost by Rs3.81, diesel's by Rs3.59 per litre. Terrorism devours over 90, 000 lives and inflicts USD150bn losses. Nepra directs PITC to update pending net-metering connections. Petroleum levy receipts: Govt sets Rs1.676trn target for FY27. Aurangzeb, SRF team discuss investment opportunities. Aurangzeb, SG ICCD discuss halal markets.

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Pakistan banks' credit to private sector in ratio of GDP declines over past three decades. Currency Rate USD PKR Interbank Selling. Item Value Crude Oil USD/Barrel. Stock Cost First Paramount Mod. (R). Jubilee Life Insurance Firm Limited(JLICL). J.A. Textile Mills Limited(JATM). In practice, the Hub Power Firm Limited(HUBC).

Taken together, the developments around SBP designates D point to a situation that is still moving, and the coming days should bring more clarity.