Karachi: Shareholders of the National Bank of Pakistan (NBP) have officially approved a significant corporate restructuring move involving the demerger of a specified portion of SME Bank’s lending portfolio. This decision was made during an Extraordinary General Meeting (EOGM) held on January 06, 2025, both at the NBP Head Office in Karachi and through electronic means.

The demerger plan, as outlined in the Scheme of Arrangement filed with the Hon’ble Islamabad High Court, aims to separate a specific portion of the lending portfolio from SME Bank and transfer it to NBP. This move will include all associated rights, obligations, titles, contracts, benefits, claims, interests, and liabilities related to the lending portfolio, thereby enhancing NBP’s lending capabilities. Meanwhile, SME Bank will retain all assets and liabilities not included in the demerged portfolio as part of the “Retained Undertaking.”

According to information available from the Pakistan Stock Exchange (PSX), this strategic move is expected to streamline operations and optimize resource allocation for both financial institutions. The demerger is in compliance with Sections 279-283 and 285 (8) of the Companies Act, 2017, and has been approved by the Board of Directors of NBP prior to being presented to the shareholders for consideration.

Furthermore, the Head-Legal Division and the National Business Head (Karachi) of the Inclusive Development Group at NBP have been authorized to manage all necessary corporate, legal, and regulatory compliances. This includes executing and delivering all requisite documents and completing regulatory requirements, such as filing necessary paperwork with the Hon’ble Islamabad High Court, to ensure the smooth execution of the demerger process.

This strategic realignment within the designated market category of financial services is anticipated to foster NBP’s growth and enhance its lending portfolio, while SME Bank can focus on its core operations, leading to potential improvements in financial performance and service delivery for both entities.