World Economy

Pak Banking Sector Progressing

Pak Banking Sector Progressing
Pak Banking Sector Progressing

Pakistan’s economy is fuelling growth across sectors, with its financial sector providing numerous opportunities for global investors.

Pakistan’s revival in fortunes since the election of Prime Minister Nawaz Sharif has seen the country’s economy enjoy surging growth since 2013, with a multitude of opportunities for foreign investors now emerging, NewsNow reported.

Few sectors better highlight this than the country’s financial industries, which have enjoyed unprecedented expansion during the past two years. Profits are up and demand for services is growing, with the country’s population increasingly looking for banking services where previously they had not.

Recent figures clearly indicate the potential of the Pakistani banking sector, with companies such as Habib Bank Limited recording six-monthly profits of PKR 16.9 billion ($162 million) in the first half of 2015, up nearly 25% on the same period last year. United Bank Limited has enjoyed consistent growth and Wajahat Husain, the firm’s president and CEO, says his company’s success reflects that of the sector–and the country–as a whole.

Overcoming those challenges have helped to turn around Pakistan’s fortunes and delivered confidence to the market. Importantly, it is not just domestic optimism either–international investors are increasingly bullish about the potential for Pakistan’s banking sector and of the 21 locally incorporated private banks, foreign investors are the majority shareholders in more than 15. It’s a similar environment with the 10 microfinance banks, with 5 entities owned by foreign shareholdings.

Part of the reason for this has been because of the capital requirements introduced by Pakistan’s government, designed to ensure a stable and well regulated banking sector. The result has been that no sector, other than oil and gas exploration, has attracted as much foreign direct investment as the financial sector over recent years and deals such as the sale of the government’s HBL stake in April 2015 marked Pakistan’s largest ever capital market transaction. With $1.02 billion raised, and $764m from foreign investment, both local and international investors have shown confidence in HBL’s future.