Mashallah. However, the doom and gloom merchants of Pakistan will continue with their moans and groans.
http://www.gulfnews.com/business/Markets/10129593.html
** Foreign banks eye big slice of Pakistan market**
Islamabad: The recent announcement from Pakistan's NIB Bank of its plans to acquire 70 per cent of Pakistan's PICIC bank in a $378 million deal is yet another event which will be well received in the markets.
The Pakistani banking sector has been abuzz with reports of prospective buyouts in the past year. During this time, the decision by Standard Chartered bank to buy out Pakistan’s privately-owned Union Bank has only confirmed the interest of international banks in Pakistan’s banking sector. Additionally, ABN-Amro, the Dutch bank has bought Pakistan’s privately owned Prime Bank to enlarge in the country.
NIB is indeed based in Pakistan but its largest shareholder - Temasek, the Singapore state investor company, is a large foreign entity. For overseas banks looking at the Pakistani market, interest in the country is driven mainly by the strong performance of Pakistani banks in recent years.
Pakistan’s banks have seen their profits soar on the back of a strong econ-omic recovery which has spurred demand increasingly from individual consumers, companies and a variety of investors. This has meant that banks have been at the centre of the recovery process, fuelling the growth cycle through lending to economic stake holders in different sectors of the Pakistani economy.
The discussion surrounding Pakistan’s banking sector is indeed a timely one. There are many who believe that the country’s banks will indeed remain active performers in the economy, successfully building up their presence in the years to come. Perhaps so but only to an extent.
Pakistan’s population base of at least 160 million provides the client base to support the expanding activities of banks in years to come. Services which were previously unknown to Pakistani clients such as the increasing use of phone banking for a variety of functions from paying bills to settling credit card dues, are now a common feature in Pakistani banks.
But if the case of Pakistani banks is seen as evidence of Pakistan’s economic uplift, then the two do not necessarily jell together. Pakistan’s economy may have recovered in some instances but its far from being an all too visible basis for trickling down the benefits to mainstream Pakistanis.
Economic gain
While activities of banks such as lending to new car owners may have given many more cars to Pakistanis, there are still many more Pakistanis who live without the benefits of such economic gains. Such is in fact the true reality of Pakistan’s economic recovery which has indeed concentrated more wealth in the hands of a few without that wealth creation being shared by many more.
For foreign banks looking at the Pakistani market, there are essentially two vital areas of prospective growth for the future.
First, the side of their businesses dealing with the matter of attracting new depositors is probably going to do well in view of Pakistan’s growing population. But Pakistan’s ability to increasingly oversee growing investments in the development of large new projects will be dependent upon its ability to continue having adequate financial space.
The reality however is that Pakistan’s budgetary position continuing to provide adequate financial space in the years to come is something that can just not be taken for granted.
Second, entering the Pakistani market can be a vital way to expand in the country, but there are also opportunities surrounding Pakistan. Within Pakistan there are newly emerging opportunities in an area like Islamic banking.