The SBP has already approved the amalgamation scheme of Barclay Bank with Habib Bank Limited (HBL) under Section 48 of the Banking Companies Ordinance 1962 with effect from June 15, 2015. On June 5, 2015, the SBP announced that the entire operations, branches, depositors and creditors of Barclays Bank will be converted and shifted to HBL after 10 days.
As part of international strategy, Barclays Bank was willing to sell its Pakistan operation and finally in March this year, Barclays Bank entered into an agreement with HBL for amalgamation of their business and operations (Pakistan) into HBL. This is the second amalgamation scheme approved by the central bank during this year as earlier the SBP had approved amalgamation of KASB Bank with BankIslami showing the consolidation of the banking industry.
On the request of HBL, SBP granted NOC in November 2014 for conducting due diligence of Barclays Bank for acquisition of its operations in Pakistan. After the amalgamation of Barclays Bank PLC (Pakistan Branch Business) with and into HBL, sanctioned under Section 48 of the Banking Companies Ordinance, 1962 ("BCO, 1962") on May 29, 2015, the State Bank of Pakistan in exercise of powers conferred on it under Section 27 (4) (i) of the BCO, 1962, hereby declares that the banking license of Barclays Bank PLC (Pakistan Branch Business) will stand cancelled effective June 14, 2015.
In another notification, in exercise of the powers conferred on it by clause (b) of Sub-Section (2) of Section 37 of the State Bank of Pakistan Act, 1956, the State Bank of Pakistan hereby directs the de-scheduling of Barclays Bank PLC (Pakistan Branch Business) with effect from June 14, 2015 on account of its merger with and into Habib Bank Limited, in terms of Sanction Order dated May 29, 2015, issued under Section 48 of the Banking Companies Ordinance, 1962.
The closure of the Barclays Bank, Pakistan operation is said to be a part of its international strategy of austerity. Barclays was operating with eight branches in Karachi, Islamabad, Rawalpindi and Lahore but was facing immense pressure from the competition with local and foreign banks in Pakistan. Sources said that HBL's balance sheet will further improve with the acquisition of Barclays Bank, which depositors' are mainly multinational companies and corporate sector entities. Earlier in 2013, HBL also acquired consumers' portfolio of Citibank at Rs 2 billion which include services of personal banking, credit cards and auto financing. Habib Bank is the biggest bank in Pakistan with largest deposit of more than Rs 1.5 trillion. The bank is operating with more than 1,644 branches across the country along with 28 offices in different countries.