Karachi – Foreign banks are gradually exiting Pakistan, a trend attributed to the country’s declining credit profile and the growing strength of local banks post-privatisation, bankers revealed.
Speaking at the two-day Future Summit 2024, which concluded on Thursday, Ahmed Khan of Citi Pakistan explained that local banks have become more competitive, challenging foreign banks’ viability in the market.
As the last American bank operating in Pakistan, Citi focuses on attracting foreign investment, supporting multinational companies, and aiding Pakistani businesses in expanding globally, particularly in emerging markets like Vietnam. The summit, with a focus on innovation and financial inclusion, brought insights from leaders across the banking sector.
Zafar Masud, Chairman of the Pakistan Banks’ Association and President & CEO of The Bank of Punjab, clarified banks’ stance on taxation, asserting that the Federal Board of Revenue (FBR) should avoid intervening in bank balance sheets. “Almost 86 per cent of the deficit is being covered by the banks, so the government should be thankful to them for providing this relief,” he said.
Atif, representing Al Baraka Bank, shared challenges for smaller banks with limited branches, explaining that Al Baraka is heavily investing in digitalisation. “Al Baraka Bank is creating an inter-franchise trade portal to connect Pakistani exporters to non-traditional export markets,” he said, noting that webinars have introduced Pakistani exporters to buyers in regions like South Africa and Bahrain.
National Bank of Pakistan’s President, Rehmat Hasnie, discussed the bank’s wider role, supporting small businesses (SMEs) and agricultural finance.
Meanwhile, Javed Ghulam Mohammad, Group Managing Director & CEO of Martin Dow Group, highlighted Pakistan’s restricted healthcare access, contrasting the $3 billion Pakistani pharma market with the $6-8 billion markets of nations like the Philippines and Vietnam. “The government of Pakistan has very little focus on education and healthcare. NGOs manage most hospitals and healthcare facilities in large cities like Karachi,” he said.
In his keynote address, Minister for Energy (Petroleum Division) Musadik Malik underscored the role of technology in shaping the future, stressing education’s central role in national progress.
“Without education, we have no future. We must track how many children are enrolling in school, how many are dropping out, and how many are not attending at all. What is the quality of higher education in the country? If there is anything that can make a real difference to a nation’s progress, it is education,” Malik said.
Earlier, Dr. Ishrat Husain, former federal minister and governor of the State Bank of Pakistan, remarked on the increasing difficulty of future predictions, citing not only technological change but also other unresolved national issues.
