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HBL: Pakistani Bank with a China Vision

HBL has become the first Pakistani bank and one of three banks from South Asia & MENA Region to open branches in China, with permission to trade in local currency, RMB. This represents a 15-year-old dream that began when bank first opened a representative office in Beijing in 2005.

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In the third week of March 2021, HBL became the first Pakistani bank to formally open a branch and serve clients in Beijing, China’s capital city. The inauguration ceremony for HBL Beijing was attended by clients, regulators, and senior executives of the bank
from across HBL’s international network.

From Pakistan, Mr. Sultan Ali Allana, Chairman – HBL, Mr. Muhammad Aurangzeb, President & CEO – HBL, along with senior executives and HBL’s customers, virtually joined the ceremony.

HBL has created history by being the first and only bank from Pakistan to have a branch in Beijing and one of the three banks from South Asia and the MENA region to offer end-toend RMB intermediation in China.

Upon commencement of business, HBL Beijing has become HBL’s second branch and its managing branch in China; both branches in Beijing and Urumqi are equipped with foreign exchange and RMB license to better facilitate customers’ requirements in multiple currencies.

HBL’s presence in China will allow the bank to interact with State-Owned Enterprises (SOEs) and leading financial institutions involved in CPEC and across Belt and Road Initiative (BRI) corridors.

China is a very important market for HBL not only in terms of the business in China and CPEC but also for Chinese companies working on projects in countries across the HBL network. HBL operates in 14 countries that include Saudi Arabia, UAE, Sri Lanka, and the UK.

The branch license to HBL was awarded by China Banking and Insurance Regulatory Commission (CBIRC) in December 2019. The preparatory work of setting up the HBL Beijing branch was undergoing since then.

Read More: HBL doubles its pretax profits and increases its international footprint

HBL has certainly created history, and Chairman HBL, Sultan Ali Allana, speaking on the occasion, explained that “HBL’s journey in China began in 2005 when we established our Representative Office in Beijing.

This was followed by the establishment of branch operations in Urumqi in 2017, and today we mark the commencement of our branch operations in Beijing. It is an extremely proud moment for us as we enhance our China franchise, and we look forward to playing a leading role in facilitating regional trade and serving our valued customers throughout HBL’s international network.

” Muhammad Aurangzeb, President & CEO, HBL, spelled out this Pakistani banks’ vision when he stated that “China is the second home market for HBL and we will grow our business in the country. China remains the lynchpin of HBL’s international strategy”.

He went on to explain that he and his team are grateful to the Chinese regulators for trusting them and granting them a branch license for dozens of international banks are lined up to open branches in Beijing.

He claimed that Chinese regulators are very supportive of developing market-based capabilities and encouraging financial institutions like HBL to provide clients best-in-class products and services.

HBL is the largest executor of CPEC related financing in Pakistan (around US $6 billion), and the bank’s presence in China has put HBL in a unique position to connect its clients across the HBL network directly with the businesses in China.

Habib Bank Limited

China: An attractive market for foreign banks?

China is fast becoming an attractive market for foreign banks and financial institutions. And there are several reasons for that. In recent years a number of measures have been taken by the Chinese Regulators to open the sector.

For instance: In case of the establishment of foreign bank branches, the requirement to have a representative office in the same city as the intended branch has been done away with.

Now a foreign bank can have a representative office in one city and a branch in another city. Similarly, the requirement of getting a domestic currency license after 3 years of operations has been changed to one year.

Read More: China Pakistan Free Trade Agreement Opening bigger and brighter opportunities

And HBL, Pakistan has been a beneficiary of both changes. In the recent past, foreign entities have been allowed to increase their shareholding up to 100% in brokerage companies.Over the past 3 years, China has announced more than 50 financial opening-up measures, covering various sub-sectors of the financial industry.

Such measures have encouraged foreign institutions from banks, insurance companies, wealth management, consumer financing, etc., to actively explore the possibilities of their material engagement in the China market.

According to OECD data, the FDI restriction index of China’s financial industry in 2019 was 0.24, down by 0.34 from 2014. HBL has set a direction for other Pakistani companies to do market-specific research and find their niche and space in the large Chinese market. FTA-II has also opened up the Chinese commodities and services sector to Pakistani businesses; now, Pakistani corporates have to show imagination and competitiveness.

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