IFC: IFC Finances Expansion of Pakistan’s
Habib Bank into Small Business, Retail, and Consumer Markets
/noticias.info/ Singapore, September 18,
2006—The International Finance Corporation, the private sector arm of
the World Bank Group, today announced $50 million in long-term funding for Habib
Bank Limited, the largest private commercial bank in Pakistan, to support its
postprivatization expansion into the retail, consumer, and small and medium
enterprise markets.
Habib Bank is the first bank in
Pakistan to raise dollar-denominated debt that can be used to expand its capital
base and provide loans with longer maturities to its
clients.
Beyond financing, IFC’s Private Enterprise Partnership
for the Middle East and North Africa (PEP-MENA) will work with Habib on a range
of technical assistance projects to:
Address the shortage of
skilled bankers in the expanding Pakistani banking system by upgrading Habib’s
staff training facilities and curriculum
Increase Habib’s capacity to
provide credit and other financial services to small and medium businesses
Collaborate with Habib, local banks, and banking associations to introduce
environmentally and socially sustainable financial products and develop the
capacity of banks to make environmental assessment of
projects
Michael Essex, IFC’s director for the Middle East and
North Africa, said, “IFC’s loan and technical assistance will support Habib’s
postprivatization expansion and make credit available to smaller enterprises
that are typically overlooked or underserved by banks, yet are the engine of
growth and economic diversification in Pakistan.”
The $50 million in IFC
financing is part of a broader $120 million investment package for Habib Bank
approved by IFC’s board, which includes a proposed equity investment and trade
finance facilities under IFC’s Global Trade Finance Program.
Zakir
Mahmood, Habib Bank’s president and CEO, said, “This loan qualifies as
tier II capital for Habib Bank and will further strengthen our strong balance
sheet. We are pleased to be working with IFC in areas of mutual
interest, that is, the development of longer-term products for smaller
businesses and other high-priority sectors. We look forward to working closely
with IFC on further projects, including the continued upgrading of banking
skills within the banking industry in Pakistan.”
Jyrki Koskelo, IFC’s
director of Global Financial Markets, said, “IFC is particularly pleased with
initiating a broad-based engagement with the leading private bank in Pakistan.
This program has several innovative features that will support the development
and expansion of the banking sector in Pakistan, which is almost entirely
private sector–led, and is moving toward increased scale, efficiency, and
sophistication.”
About IFC
The International Finance Corporation, the
private sector arm of the World Bank Group, is the largest multilateral provider
of financing for private enterprise in developing countries. IFC finances
private sector investments, mobilizes capital in international financial
markets, facilitates trade, helps clients improve social and environmental
sustainability, and provides technical assistance and advice to businesses and
governments. From its founding in 1956 through FY06, IFC has committed more than
$56 billion of its own funds for private sector investments in the developing
world and mobilized an additional $25 billion in syndications for 3,531
companies in 140 developing countries. With the support of funding from donors,
it has also provided more than $1 billion in technical assistance and advisory
services. For more information, visit www.ifc.org.
About Habib Bank
Habib
Bank is the leading private commercial bank in Pakistan, which was privatized in
2004 following sale of a 51 percent stake and management rights to the Aga Khan
Fund for Economic Development. As of December 31, 2005, Habib Bank had
total consolidated capital of $687 million, total assets of $8.9 billion. It has
over 14,000 employees and a network of 1,425 branches across the country, in
addition to a large international network in 26 countries.
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