The State Bank of Pakistan (SBP) has appointed a new management board for United Bank (UBL). Governor Mohammad Yaqub told a news conference on 20 April ‘the new management has been directed to initiate steps to ensure prudence in lending… and to reduce administrative costs of the bank.’ The governor said that the changes would not affect the privatisation of the bank.

The government agreed to sell a 26 per cent stake in UBL to Saudi Bisharahil in February. However, the transfer of management has been delayed due to a legal challenge, mounted in the courts by a depositor.

The Bank of England has expressed concern about UBL, which has a considerable presence in the UK. A letter leaked to the Karachi daily Dawn from the Bank was quoted as saying, ‘UBL fails or may fail in several respects’ to comply with the Bank’s requirements.

UBL is Pakistan’s second largest commercial bank. It carries a heavy burden of doubtful debts. Pre-tax profits in 1995 were Rs 7 million ($202,000) compared with Rs 59 million ($1.7 million) in 1994. It has paid up capital of Rs 1,480 million ($42 7 million)