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United Bank Limited (UBL) shareholders have approved a further equity investment of up to Rs22 billion in Khushhali Microfinance Bank Limited (KMBL), subject to the discounted rights issue and regulatory approvals. The move could increase UBL’s stake while supporting KMBL’s recapitalisation and financial stability.
United Bank Limited (UBL) shareholders have approved a further equity investment of up to Rs22 billion in Khushhali Microfinance Bank Limited (KMBL), potentially increasing UBL’s aggregate shareholding in the microfinance lender.
According to Profit by Pakistan Today and Business Recorder, the approval was granted at UBL’s Extraordinary General Meeting (EOGM) held on August 24, 2026. The special resolution received the required majority of at least three-fourths of shareholders entitled to vote and present in person, through proxy or postal ballot.
The investment remains subject to KMBL proceeding with its discounted rights issue and obtaining the required corporate and regulatory approvals. Business Recorder quoted UBL’s PSX notice as saying: “UBL to make further equity investment in Khushhali Microfinance Bank Limited of up to Rs22 billion, which may increase its aggregate shareholding in KMBL accordingly.”
Under the approved arrangement, UBL can participate in KMBL’s proposed rights issue in proportion to its existing holding. The rights issue will offer approximately 51.166 new ordinary shares for every one existing KMBL share, with each new share carrying a face value of Rs10 but offered at a subscription price of only Rs2.
The Rs2 price represents an Rs8 discount to the shares’ face value. UBL has also been authorised to subscribe to any shares left unsubscribed under the rights issue in its capacity as underwriter.
In addition, UBL may acquire further KMBL shares through separate transactions or arrangements negotiated and finalised by its authorised representatives. Profit reported that these routes give UBL flexibility to increase its overall exposure to KMBL while supporting the bank’s recapitalisation.
The transaction is significant because KMBL has faced substantial capital erosion. UBL’s earlier EOGM documentation stated that KMBL’s shareholders’ equity stood at approximately negative Rs16.154 billion as of December 31, 2025. The microfinance bank was therefore not compliant with the minimum capital requirements prescribed by the State Bank of Pakistan, with the regulator directing KMBL to address its capital shortfall.
The proposed investment is intended to support KMBL’s recapitalisation and broader financial-sector stability. The company’s EOGM documents stated that the investment’s purpose was “to support the recapitalization of KMBL” and that it was “also expected to support broader financial sector stability in Pakistan.”
UBL had already approved the investment plan at board level in July. That broader plan included up to Rs22 billion for KMBL, Rs8 billion for a technology-enabled agriculture advisory and research subsidiary, and Rs10 billion over three to five years for establishing a university.
KMBL, meanwhile, remains focused on financial inclusion and providing microfinance services to underserved households, entrepreneurs and communities across Pakistan. Its official LinkedIn page describes the bank’s mandate around “Microfinance, Loans, Savings, Insurance, and Remittances & Other Products.”
The latest shareholder approval clears an important corporate hurdle for UBL’s proposed investment, although completion remains dependent on the rights issue and applicable regulatory approvals.
