KARACHI: The State Bank of Pakistan (SBP) has designated National Bank of Pakistan, United Bank Limited, and Habib Bank Limited as Domestic Systemically Important Banks (D-SIBs) for 2025, requiring compliance with enhanced regulatory, supervisory, and capital requirements.
The designation of D-SIBs is a key element of the supervisory framework for identifying and mitigating systemic risks, announced in accordance with the Framework for Domestic Systemically Important Banks (D-SIBs), the central bank said in a statement issued here.
“SBP has carried out the annual assessment of banks based on their financial statements as of December 31, 2024. As per the assessment, three banks — National Bank of Pakistan, United Bank Limited, and Habib Bank Limited — have been designated as D-SIBs for 2025,” the statement added.
The SBP also instructed branches of Global Systemically Important Banks (G-SIBs) operating in Pakistan to maintain additional CET-1 capital against their risk-weighted assets in Pakistan at the rate prescribed by the Financial Stability Board for their respective principal G-SIBs.
The framework — consistent with international standards and aligned with local financial and economic circumstances — specifies the methodology for identifying D-SIBs, enhanced regulatory and supervisory requirements, and implementation guidelines. The SBP said these enhanced requirements aim to strengthen the resilience of systemically important banks against shocks and improve their risk management capacities.
In addition to enhanced supervisory requirements under the D-SIB framework, the designated banks are required to comply with additional Common Equity Tier-1 (CET-1) capital requirements effective March 31, 2026, for meeting Higher Loss Absorbency (HLA) standards.
The National Bank of Pakistan has been placed in ‘Bucket D’ with a 2.5% additional CET-1 requirement, while United Bank Limited and Habib Bank Limited — both placed in ‘Bucket C’ — are required to comply with a 1.5% additional CET-1 requirement.
This regulatory requirement follows a bucketing approach, where the level of capital surcharge increases with the systemic importance of a bank as determined by the composite systemic score.
Under the framework, the identification of D-SIBs is carried out annually through a two-step process. First, sample D-SIBs are identified according to prescribed quantitative and qualitative criteria. In the second step, D-SIBs are designated from among the sample based on their composite systemic scores in terms of size, interconnectedness, substitutability, and complexity.
