HBL sets up subsidiary to boost agriculture and food security in Pakistan

KARACHI: HBL is capable of taking the lead in promoting food security and the development of the agricultural sector in Pakistan because of the bank’s steadfast dedication to sustainability in line with the country’s strategic aims, President and Chief Executive Muhammad Aurangzeb said.

Aurangzeb made these comments after the State Bank of Pakistan approved the incorporation of "HBL Zarai Services Ltd." as a wholly-owned subsidiary of the bank, subject to receiving of all required approvals.

HBL informed the Pakistan Stock Exchange of this occurrence in a notice on Friday.

“Being Pakistan’s leading Bank, we recognize this position comes with great responsibility. Our unwavering commitment to sustainability, under the guidance of the Aga Khan Development Network (AKDN) and in line with Pakistan’s strategic priorities, is enabling us to play a leading role in developing the agricultural sector and promoting food security,” Aurangzeb said in its statement to The News.

“In the decades ahead, water and food will remain key national challenges, alongside growing population, and climate change,” he added.

HBL Zarai Services is a fully owned subsidiary of HBL. It is the pioneer agriculture extension services company in Pakistan, that places HBL in a unique position to significantly contribute towards improving value chains across every economically significant sector, the bank’s CEO said.

“HBL Zarai Services will provide agronomic advisory, farm inputs, farm mechanization, physical and electronic markets for farm produce, warehousing, and logistics facilities to farmers. The Company will extend these services through first-of-its-kind integrated distribution centers.” “We are proud and excited to embark on this journey of national development and growth while promoting sustainable and traceable green banking portfolios.”

HBL’s top priority is agricultural financing, which is why the portfolio in 2022 hit an all-time high of Rs50.6 billion. The bank has contributed over Rs4 billion - spread over a decade - to the social uplift of Pakistan. In 2022 alone, the bank contributed over Rs580 million.

Climate change has been adopted as one of the main themes in the SBP Vision 2028, to enhance risk mitigation and management capabilities. The risks emanating from climate change in the form of natural calamities can adversely impact price and financial stability, economic growth, and poverty levels in the country.

Pakistan is ranked among the top 10 countries that are most vulnerable to climate change; this is even though Pakistan’s contribution to global CO2 emissions is very marginal, according to the SBP’s Vision 2028 document.

During 2000-2019, the country has experienced 173 climate-related extreme events. The detrimental impact of environmental degradation and climate change on economic growth are real and their severity and intensity have increased manifold in the past few years. In 2022, the country experienced some abnormally high downpours and flooding, that were never observed in Pakistan’s history.