Financial Sector Case Studies

Ghulam Samad () and Naseem Faraz ()
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Ghulam Samad: CAREC Institute
Naseem Faraz: Pakistan Institute of Development Economics

Chapter Chapter 9 in The Face of Privatization in Pakistan, 2024, pp 115-123 from Springer

Abstract: Abstract The transition of Pakistan’s financial industry from state-controlled to privately owned entities through privatization has yielded diverse outcomes. Through a historical lens, this chapter analyses the impact of privatization on the financial sector in Pakistan, focusing on case studies of Allied Bank Limited (ABL) and Habib Bank Limited (HBL). The chapter outlines the challenges faced by ABL post-privatization, including a surge in non-performing loans (NPLs) and financial losses. This led to significant restructuring efforts by the State Bank of Pakistan (SBP) to stabilize the bank’s operations and prepare it for re-privatization. In contrast, HBL’s privatization experience, marked by management control transfer to Aga Khan Fund for Economic Development (AKFED), resulted in a swift turnaround and notable improvements in financial performance.” In light of these insights, the chapter advocates for a refined approach to privatization, one that carefully balances privatization objectives with broader economic development goals and ensures the resilience of the financial system.

Keywords: Financial Industry; Financial Sector in Pakistan; Allied Bank Limited (ABL); Habib Bank Limited (HBL); State Bank of Pakistan (SBP) Restructuring Efforts; Financial System Resilience (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:spr:sprchp:978-981-97-8385-4_9

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DOI: 10.1007/978-981-97-8385-4_9

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