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March 28, 2020

IFC Extends $150 million in Loan to Pakistan’s HBL, Invest $75 million in Equity

Burke – IFC would extend upto $150 million in loan to HBL, Pakistan’s biggest bank by assets, in addition to $75 million in equity investment to help its domestic and international growth and strengthen the country’s private sector.

“We partner with banks like HBL because they have the scale, outreach, and depth to transform financial inclusion and private sector development,” said Mouayed Makhlouf, IFC Regional Director for the Middle East and North Africa, in a May 20 announcement.

The new funding for HBL is the first after Pakistan’s government, in April, sold its remaining 609 million shares in the bank for $1.02 billion in response to offers made during three days of book-building at New York, London, Dubai and Singapore. Shares were sold at a strike price of 168 rupees.

IFC’s investment is expected to help HBL launch programs to attract more women depositors and increase lending to agriculture and rural borrowers. A financial arm of the World Bank, IFC’s current investment exposure in Pakistan is about $1.1 billion in over 45 companies in sectors including infrastructure, financial markets, and general manufacturing and services.

Listed on the country’s three stock exchanges with a customer base of over 8 million, the HBL was privatized in 2004, with 51% shares sold to the Aga Khan Fund for Economic Development along with management control. Pakistan’s government at the time retained 42.5 percent shares, which were sold today. The remaining 7.5 percent shares are owned by the general public, following the public listing in July 2007.

HBL was the first commercial bank established in 1947, the year Pakistan gained independence from the British colonial rule. The bank has over 1,600 branches and has a presence in as many as 29 countries, according the bank’s official website.

The bank is expanding its presence in international and regional markets including the U.K., UAE, South and Central Asia, Africa and the Far East. Its first international branch was established in Colombo, Sri Lanka in 1951. The bank’s international operations include USA, Singapore, Oman, Belgium, Maldives and the Netherlands.

“Our strong market presence enables us to be a key player in promoting financial inclusion and reaching out to critically underserved segments in Pakistan,” Nauman Dar, HBL’s President and CEO was quoted as saying by the IFC statement

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