Let No One Write UBL’s Epitaph — Yet!
The Federal Government has handed over the management of United Bank Limited (UBL) to the State Bank of Pakistan (SBP) by invoking Section 41, Sub-section A, B and C of the Banking Companies Ordinance. At the same time it is rumoured that the deal with Saudi Basharahill whereby UBL was being privatised has been cancelled. For its part SBP has with immediate effect changed the management of UBL in order to stop the run on the bank that has seen depositors withdraw their money in droves. To protect the interests of the Clients the Government of Pakistan guarantee is being doubly backed by SBP guarantee.
Ms Benazir’s Government is to be congratulated for having taken strong action after months of vacillation. Instead of allowing UBL to go down the drain in the hands of inept, corrupt management, alternately guided by remote control from Islamabad or from a strongly entrenched Union, the Government of Pakistan’s (GoP) stern measures will go a long way in shoring up UBL’s crumbling corporate profile. A change of leadership will act as a strong shot in the arm which may well see this bank regain the confidence of the public and be privatised in the future in a more orderly manner, not as the fire-sale of the century. UBL has very good assets, particularly its credit lines and arrangements with foreign correspondent banks, its profitable network of foreign branches, its real estate holdings, a loyal customer-base, etc. If Muslim Commercial Bank (MCB) and Allied Bank Limited (ABL) could be turned around by pure Pakistani management after privatisation, why not acquire the same type of management team to do the right thing by UBL before privatization ?
