Tuesday August 16, 2022

National Bank to open two branches in China next year

August 12, 2017

KARACHI: National Bank of Pakistan (NBP) will open at least two branches to launch its banking operations in China in a bid to not only expand its footprint in the Asian giant’s market, but also finance projects related to the China-Pakistan Economic Corridor (CPEC), a statement said on Friday. 

“We are going to have two full-fledged branches in the two major cities of China by the mid of next year,” Saeed Ahmad told a group of reporters in his first media interaction after taking over as the new president of NBP in March.

“One branch will be set up in Beijing, while the other will be established in Shanghai. The branches will extend project financing and provide foreign trade facilities to the Chinese and Pakistani clients.”

NBP will be the second Pakistani bank to start operations in China. Habib Bank Limited, the country's largest bank, has already its footprints in the neighbouring country. 

Ahmad added the bank has already set up a representative office in Beijing, China since 1981 to provide banking facilities to the Chinese and Pakistani corporates.     

“The Chinese financial regulator has very tough requirements for foreign bank branches, but we are hopeful to meet all of the requirements necessary to start business operations,” he said.

Industry sources said the Chinese government is expected to grant a licence to the NBP to establish a branch in Beijing in the next three months.

Pointing to the challenges that can face potential entrants in the Chinese financial industry, Ahmad said, “It’s [China] a very competitive market and only banks with niche products and services can sustain there.”

The NBP chief emphasised that the CPEC, which was a flagship project of Chinese Silk Road, “One Belt One Road” is a great source of attraction for many Pakistani financial institutions, at least for the coming decade.   

“The setting up of special economic zones along the CPEC route is expected to boost industrial activity, create employment, increasing the need for long-term project financing,” Ahmad observed.

He also revealed the bank was likely to launch Prime Minister Youth Business Loan (PMYBL) scheme under its Islamic banking division within a month to attract faith-based customers.  

“The upcoming product will make the National Bank of Pakistan first bank to offer a Shariah-complaint product under Prime Minister Youth Business Loan,” said he.

Wrapping up his statement, he said the NBP’s management was making all-out efforts to make it at par with private sector banks in terms of technology and automation.  “The bank is planning to expand its nationwide ATM network to 200,” he added.