The rumor spread quickly. And the United Bank Limited’s (UBL) share took a nosedive on Friday’s intraday trade on talks that the top management of the bank was sacked. The UBL and the State Bank of Pakistan (SBP) strongly rejected the reports, terming them as baseless rumour.
“The Board of Directors (BoD) of UBL repose fullest confidence in the President and CEO, Mr. Wajahat Husain and the management team of the bank,” UBL said in a statement to clarify the situation. “The BoD strongly rejects all rumours being spread on this matter.
The BoD also records its appreciation for achieving record financial results, improving efficiency of the Bank and the awards and recognition received under the leadership of Mr. Wajahat Husain.”
It all started on Thursday when a group of senior officials from the United Bank Limited were barred from travelling abroad at the Karachi airport. A spokesman at central bank confirmed that the bank’s delegation was stopped at the airport on Thursday evening as they were travelling to Bangkok in violation of ‘code of corporate governance’.
A banker said the State Bank circulated an email to the heads of all banks on Thursday, asking them to submit the details of other-than-official trip of their officials.
“I think the rumours of arresting the delegation of the United Bank Limited came as the State Bank of Pakistan has taken a serious notice of the frequent sponsored foreign visits of several banks’ officials in the name of training and entertainment,” the banker said. The spokesman also snubbed the reports of ‘the layoff’ as sheer rumors.
Analyst Ahsan Mehanti at Arif Habib Limited said the UBL witnessed a selling pressure, “but the intensity was low because of lacklustre market.”
“UBL’s scrip lost value and slid close to the lower lock on rumours regarding removal of the management,” Mehanti said.
“However, it recovered in the second half of the trading as there was news that UBL would soon be issuing a clarification.”
Most of the banking shares, in the broader market, closed in red.
However, United Bank Limited suffered a heavy 2.4 percent loss, contributing 58 points to the day’s loss of 200 points.
Analyst Ali Raza at Elixir Securities said UBL was the day’s laggard as it likely came under pressure on “rumours of change in its leadership.”
Dealers said the bank acted a bit slow in issuing the clarification, which was circulated after the closure of trading hours.
“Had the clarification been issued on time, the loss to the scrip could have been minimal,” a dealer said.
Industry officials said a circular issued by Habib Bank Limited said its head of branch banking Semi Kamil is leaving the bank to join another financial institution also supported the rumor of UBL’s management change . “The circular gave an impression that Hussain is leaving the country and Kamil would set to assume her new role on this position,” a banker said.