KARACHI: United Bank Limited (UBL) has executed a Rs20 billion interest rate swap with a subsidiary of Engro Holdings Limited, marking the lender’s latest large-scale derivatives transaction as Pakistan’s corporate sector steps up the use of hedging tools.
The deal allows Engro to hedge interest rate risk on long-term rupee exposures, improving cash-flow visibility and strengthening its risk management framework, the companies said in a statement on Monday.
The transaction follows UBL’s Rs75 billion interest rate swap earlier this year — the largest such deal concluded in Pakistan.Engro Chief Executive Abdul Samad Dawood said the swap would help the group better manage rate volatility and uphold disciplined financial stewardship. UBL President and Chief Executive Muhammad Jawaid Iqbal said the rapid succession of large transactions signalled increasing corporate appetite for sophisticated treasury solutions.
Pakistan’s financial institutions have been seeking to deepen capital markets and expand risk management products as corporates contend with interest rate volatility and tighter liquidity conditions. The latest swap indicates a gradual shift by major companies towards structured hedging strategies historically underutilised in the domestic market.
UBL, which operates more than 2,000 branches and serves over 10 million customers nationwide, was the first Pakistani bank to surpass Rs1 trillion in market capitalisation. The lender said it remains committed to expanding large-scale hedging solutions to support corporate balance sheet resilience.
