KARACHI: Foreign banks are gradually withdrawing from Pakistan due to the country’s declining credit profile, while local banks, having grown significantly post-privatisation, are outcompeting their foreign counterparts, according to bankers.

Speaking at the two-day Future Summit 2024, which concluded on Thursday, Ahmed Khan from Citi Pakistan explained that local banks have expanded since privatisation, making it harder for foreign banks to remain competitive.

Citi is now the only American bank operating in Pakistan, focusing on attracting foreign investment and supporting multinational companies, while helping Pakistani businesses expand globally, particularly in markets like Vietnam, where Citi can provide significant support.

The summit, which focused on innovation and financial inclusion, featured insights from top leadership at both local and foreign banks.

Bankers say local banks take the lead post-privatisation

Zafar Masud, Chairman of the Pakistan Banks’ Association and President & CEO of The Bank of Punjab, said banks are not opposed to taxation, but emphasised that the Federal Board of Revenue (FBR) should not interfere in their 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 added.

Mr Atif, representing Al Baraka Bank, discussed the challenges faced by smaller banks with limited branches, revealing that Al Baraka is heavily investing in a digital strategy.

“Al Baraka Bank is creating an inter-franchise trade portal to connect Pakistani exporters to non-traditional export markets,” he said, adding that through webinars, the bank has introduced Pakistani exporters to buyers in markets like South Africa, Bahrain, and beyond.

Rehmat Hasnie, President of National Bank of Pakistan, said the bank’s responsibilities extend beyond regular banking, and they are committed to supporting small businesses (SMEs) and agricultural finance across the country.

Javed Ghulam Mohammad, Group Managing Director & CEO of Martin Dow Group, emphasised the importance of accessible healthcare.

He noted that pharmaceutical access is severely limited in Pakistan, comparing the country’s pharma market of $3 billion with the $6-8bn markets of countries 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 added.

In his keynote address, Minister for Energy (Petroleum Division) Musadik Malik highlighted the pivotal role of technology in the evolving global landscape, stressing that the future of progress depends on education.

“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,” he said.

Earlier, Dr Ishrat Husain, former federal minister and governor of the State Bank of Pakistan, expressed concern that the complexity of future predictions is not only due to technological advancements but also due to other unresolved issues facing the country.

Published in Dawn, November 8th, 2024

Follow Dawn Business on Twitter, LinkedIn, Instagram and Facebook for insights on business, finance and tech from Pakistan and across the world.

Opinion

Editorial

Military option
Updated 21 Nov, 2024

Military option

While restoring peace is essential, addressing Balochistan’s socioeconomic deprivation is equally important.
HIV/AIDS disaster
21 Nov, 2024

HIV/AIDS disaster

A TORTUROUS sense of déjà vu is attached to the latest health fiasco at Multan’s Nishtar Hospital. The largest...
Dubious pardon
21 Nov, 2024

Dubious pardon

IT is disturbing how a crime as grave as custodial death has culminated in an out-of-court ‘settlement’. The...
Islamabad protest
Updated 20 Nov, 2024

Islamabad protest

As Nov 24 draws nearer, both the PTI and the Islamabad administration must remain wary and keep within the limits of reason and the law.
PIA uncertainty
20 Nov, 2024

PIA uncertainty

THE failed attempt to privatise the national flag carrier late last month has led to a fierce debate around the...
T20 disappointment
20 Nov, 2024

T20 disappointment

AFTER experiencing the historic high of the One-day International series triumph against Australia, Pakistan came...