Habib Bank Limited has signed an agreement that will allow it to acquire operations of Barclays Bank Pakistan PLC. After the central bank has given the final approval, the deal will be sealed. The central bank needs to review the sale-purchase exercise in a few weeks. The State Bank of Pakistan had allowed the Habib Bank Limited in 2013 to oversee the operation of Barclay Bank in Pakistan.
Barclay bank is operating with 8 banks in Karachi, Islamabad, Rawalpindi and Lahore. The local competition has been too much for the Barclays Bank and it suffered even more, when its president, Shahzad Dad decided to join Standard Chartered as its CEO last year. Habib Bank has been able to acquire Citi bank’s consumer’s portfolio in 2013 after a tough competition with MCB bank and Bank of Alfalah.
Habib Bank will integrate its business in accordance to the section 28 of the banking company’s ordinance 1962. It will also need approval of the Competitive Commission of Pakistan and General Stakeholders as well. Foreign banks are withdrawing their services from Pakistan due to a tough competition put up by both local and foreign banks. Last year, Meezan Bank acquired HSBC in 2914, while Faysal bank acquired the Royal Bank of Scotland in 2010. Standard Chartered is also closing down its branches quickly, which is a big concern.
HBL will seek to improve its balance sheet further with acquisition of bank’s branches, its assets and its depositors’ mainly multinational companies and corporate sector entities. HBL is the biggest bank in Pakistan with 1600 branches and Rs 1.5 trillion worth of deposits.