Bank AL Habib Limited, one of Pakistan’s leading commercial banks, has announced its intention to establish an Exchange Company (EC) as a wholly-owned subsidiary, becoming the fourth bank to make such an announcement in recent weeks. The bank’s Board of Directors shared this development in a notice to the Pakistan Stock Exchange (PSX).
KT Bank Approved for Digital Banking in Pakistan
According to the notice, the Board of Directors approved the establishment of the Exchange Company with an authorized share capital of Rs1 billion ($5.8 million) on September 19, 2023. However, this move is subject to approval and clearance by the State Bank of Pakistan (SBP) and compliance with other regulatory requirements.
Bank AL Habib emphasized that the EC would be entirely owned by the bank, following in the footsteps of MCB Bank Limited, Meezan Bank Limited, and United Bank Limited (UBL), all of which have announced similar plans to establish wholly-owned Exchange Companies.
Daraz and Meezan Bank Partner to Drive Electric Bike Adoption in Pakistan
This development comes in response to structural reforms introduced by the SBP earlier this month, aimed at strengthening controls in the Exchange Company sector. As part of these reforms, prominent banks engaged in foreign exchange business are required to establish wholly-owned Exchange Companies to address the legitimate foreign exchange needs of the general public. The SBP also increased the minimum capital requirement for ECs from Rs200 million to Rs500 million, raising the entry barrier for the private sector.
SBP granted in-principle approval (IPA) for establishing 5 digital retail banks
Bank AL Habib reported significant growth in core earnings, with a 69% year-on-year increase in Profit Before Tax (PBT) for the first half of 2023, reaching Rs31.14 billion. Profit After Tax (PAT) also saw remarkable growth, rising by 90% to reach Rs18.2 billion, translating into Earnings Per Share (EPS) of Rs16.39 compared to Rs8.63 in the same period the previous year.