Banking Sector

The Pakistani banking sector comprises of about 33 banks (updated as of June-18) including five public
and four foreign banks and twenty-four local private banks. Most of the banking activity is concentrated
in a selected few of the sector i.e. six banks are the main competitors of the economy and have a
significant part of the banking assets in Pakistan. More precisely, these banks together represent more
than 57% of deposits and 53% advance in the economy. These include the following:

 Habib Bank Limited (HBL),

 National Bank Limited (NBL),

 United Bank Limited (UBL),

 MCB Bank Limited,

 Allied Bank Limited (ABL) and

 Bank Alfalah Limited.

The sector is regulated by the State Bank of Pakistan (SBP), which regulates local banks in
accordance with its prudential rules. In addition, banks must comply with Basel III international
standards. The potential in this segment is enormous. The number of bank accounts is 43
million with a total population of 195 million (updated as of June-18) . The reasons for this
huge difference are limited access to technology in the country, the reluctance of banks for
religious reasons and a large rural population without a bank account in the country. However,
the growth potential is enormous, mainly due to the introduction of high-speed mobile
Internet, the advent of the Islamic banking, and a greater awareness of the benefits of banking
in the country.
Some of the challenges faced by the sector include the effectiveness of supervisory and
regulatory capabilities of governing institutions (SBP and SECP), reinforcement of Legal
Infrastructure, and restructuring of DFI’s (development finance institutions).

Due to the increased competition in domestic banking system, the banks are shifting to new
business areas i.e. Consumer loans, mortgage financing, SME financing and agriculture lending.
Similarly, the biggest opportunity for national banks is to integrate into international financial
markets.
Exhibit 1 Key Statistics of Scheduled Banks in Pakistan
Exhibit 2 Liquidity Position of Scheduled Banks

References:
http://www.sbp.org.pk/publications/anu_stats/2018/Part-1/liquidity.pdf

http://www.sbp.org.pk/publications/schedule_banks/June-2018/Title.pdf

https://internationalbanker.com/banking/outlook-banking-industry-pakistan/