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Habib Bank Limited

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This is an old revision of this page, as edited by 75.49.251.113 (talk) at 19:33, 13 April 2013 (→‎Controversy: minor grammatical error fixed). The present address (URL) is a permanent link to this revision, which may differ significantly from the current revision.

For other uses of "Habib Bank", see Habib Bank (disambiguation)

HBL
Company typePublic Limited Company (PSX: HBL)
IndustryBanking
Capital Markets
FoundedBombay (now Mumbai), in 1941.
HeadquartersHabib Bank Plaza, Karachi, Pakistan
ProductsLoans, credit cards, Savings, Consumer Banking etc.
RevenueIncreasePKR 76.08 bn (USD 903.07 million) - 2009[1]
IncreasePKR 13.4 bn (USD 159.07 mln) - 2009[1]
WebsiteHabib Bank Limited www.hbl.com

HBL (Urdu: حَبيب بينك) (formerly Habib Bank Limited) now referred to as "HBL Pakistan" and headquartered in Habib Bank Plaza, Karachi, Pakistan, is the largest bank in Pakistan. The bank has a network of over 1450 branches in Pakistan and 55 branches worldwide. It has a domestic market share of over 40%. It continues to dominate the commercial banking sector with a major market share in inward foreign remittances (55%) and loans to small industries, traders and farmers.

File:Habib bank logo.JPG
Habib Bank Logo

Services

Habib Bank offers the basic range of banking services to its customers, to include commercial, bank in the emerging markets.

History

File:Location of branches of Habib Bank.JPG
The branches of Habib Bank in Pakistan
File:Habib Bank Plaza.jpeg
HBL Plaza in Karachi

Mohammed Ali Jinnah, Pakistan's founding father, realized the importance of financial intermediation while he was campaigning for the creation of a separate homeland for the Muslims of India. He persuaded the Habib family to establish a commercial bank that could serve the Indian Muslim community. His initiative resulted in the creation of Habib Bank in 1941, with HO in Bombay (now Mumbai), and fixed capital of 25,000 rupees. The bank played an important role in mobilizing funds from the Muslim community to finance the All-India Muslim League's campaign for the establishment of Pakistan. Habib Bank also played an important role in channeling relief funds to Muslims hurt in the communal riots and violence that preceded the departure of the British from India.

After the formation of Pakistan in 1947, Habib Bank moved its headquarters to Karachi, Pakistan's first capital, at the urging of Governor-General Jinnah. This gave Karachi its first commercial bank of the newly formed Pakistan. The Habib family would own and manage the bank until the Pakistan government nationalized it on 1 January 1974.

In the 1950s, the HBL started its international expansion. In 1951 it opened the first of what would become three branches in Sri Lanka. The next year HBL established established Habib Bank (Overseas). Then in 1956 HBL opened the first of five branches in Kenya.

  • 1957 or 1958 HBL opened a branch in Aden.
  • 1961 HBL opened the first of what would become 6 branches in the UK.
  • 1964 HBL opened the first of 4 branches in Mauritius and a branch in Beirut.
  • 1966 HBL opened the first of 8 branches in the UAE.
  • 1967 HyderMohamedali Habib founded Habib Bank PLC Zurich. After the Pakistan nationalised Habib Bank Ltd in 1974, this became the main branch of the family held Habib Bank.[2]
  • 1969 HBL opened the first of 3 branches and an OBU in Bahrain. However, HBL’s branch in Aden was nationalized.
  • 1971 HBL opened an OBU in Singapore and a branch in New York.
  • 1972 HBL opened the first of 11 branches in Oman. HBL constructed Habib Bank Plaza in Karachi to commemorate the bank’s 25th Anniversary.
  • 1974 The government of Pakistan nationalized HBL and HBL merged with Habib Bank (Overseas).
  • 1975 HBL opened a branch in Belgium. HBL also merged with Standard Bank, a Pakistani bank.
  • 1976 HBL opened a branch in the Seychelles, the first of two branches in Bangladesh, and a branch in the Maldives.
  • 1979 HBL opened a branch in the Netherlands.
  • 1980 HBL opened a branch in Paris and another in Hong Kong.
  • 1981 HBL established Nigeria Habib Bank with 40% ownership. HBL also opened a representative office in Teheran.
  • 1982 HBL opened a branch in Khartoum.
  • 1983 HBL opened branch in the Karachi EPZ and a branch in Istanbul.
  • 1984 HBL established Habib American Bank in New York with a branch each in Manhattan and Queens, and a US International Banking Facility. HBL also opened a branch in California.
  • 1987 HBL opened in Australia.
  • 1991 The Habib Group established a separate private bank, the Bank AL Habib, after private banking was re-established in Pakistan. HBL opened a branch in the Fiji Islands, and took over the branches in Paksistan of failed bank, BCCI.
  • 1992 In Nepal HBL acquired 20% of Himalayan Bank.
  • 1995 HBL established a representative office in Cairo.
  • 1990s HBL established Habib Finance (Australia), and Habib Finance International Limited, Hong Kong.

On 13 June 2002 Pakistan's Privatization Commission announced that the Government of Pakistan would grant the Aga Khan Fund for Economic Development (AKFED), a subsidiary of the Aga Khan Development Network, majority ownership of HBL against an AKFED's investment in the bank.[3]

During 2002, HBL's UK operation came close to being shut down due to regulatory issues with the Financial Services Authority. The issue was resolved by converting the operations to a subsidiary. Then Habib Bank Limited and Allied Bank of Pakistan merged their operations (Habib contributed its 6 branches and Allied its 4), into a new bank, called Habib-Allied International Bank, in which Habib Bank has a 90.5% shareholding, while Allied Bank has 9.5%. Simultaneously with the transfer of business to the new bank, both Allied and Habib Bank closed down all independent operations in the UK.

In 2003 HBL received permission to open a branch in Afghanistan.

On 29 December 2003, Government of Pakistan granted AKFED rights to 51% of the shareholding in the bank against an investment of PKR 22.409 billion (USD 389 million).[4] the next year, on 26 February, the government of Pakistan handed over management control of Habib Bank to AKFED. The Board of Directors was reconstituted to have four AKFED nominees, including the Chairman and the President/CEO and three Government of Pakistan nominees.[5] The bank's owners now comprise the Aga Khan Fund for Economic Development (51%), Government of Pakistan (42.5%), and the general public (7.5%).

In 2006 HBL sold the operations that it had established in Fiji in 1991 to Bank of South Pacific.

In 2009 HBL was granted permission to open Remnibi accounts in China. It already has training and shareholding arrangements with Ürümqi Commercial Bank.[6]

Controversy

Habib bank has long been scrutinized by intelligence officials monitoring terrorist money flows.[7]

On 18 July 2007, Mariane Pearl, the widow of Wall Street Journal reporter Daniel Pearl, filed a lawsuit against Habib Bank Ltd over the 2002 abduction, torture and murder of her husband. The pending lawsuit alleges the bank and its subsidiaries knowingly conducted financial transactions and provided account services on behalf of Al Akhtar Trust, a Pakistani-based charity trust. Al Akhtar Trust’s accounts have been used to provide financial support to terrorists.[8] However, HBL claims to have frozen Al Akhtar Trust’s accounts several years before Daniel Pearl’s abduction.[9]

On 24 October 2007, Pearl's lawsuit against HBL was formally dropped. Lawyers for Mariane Pearl noted that Habib Bank Limited and the other defendants in the case had not answered the lawsuit filed in July (although Habib Bank Limited had denied ever supporting terrorism),[10] but they otherwise did not explain their reason for dropping the action.[11]

The U.S. Federal Reserve Board and the New York State Banking Department criticized Habib Bank Limited for failing to address deficiencies in its compliance with U.S. anti-money laundering laws. After the U.S. Federal Reserve Board threatened formal charges, though none were filed, Habib Bank Limited agreed to strengthen the bank's compliance.[12] More specifically, the Fed ordered HBL to strengthen its transaction monitoring systems and the filing of "suspicious activity reports" on transactions that do not fit the routine business patterns of the bank's customer base.

See also

References

  1. ^ a b http://www.hbl.com/downloads/pdf/annual/2009/financial-statements-group.pdf
  2. ^ Obituary notice in Neue Zürcher Zeitung 108/2011.
  3. ^ "Summary of Project Information, Habib Bank Ltd". Summary of Project Information, Habib Bank Ltd - International Finance Corporation. 1 December 2006. Retrieved 5 December 2007.
  4. ^ History HBL Retrieved 27 December 2011
  5. ^ "History". HBL. 5 December 2007. Retrieved 5 December 2007.
  6. ^ http://www.dailytimes.com.pk/default.asp?page=2009\04\10\story_10-4-2009_pg5_13
  7. ^ Michael Isikoff and Mark Hosenball (7 April 2004). "Terror Watch: Tangled Ties". Newsweek.
  8. ^ "U.S. Designates Al Akhtar Trust". Retrieved 22 July 2007.
  9. ^ "HBL froze banned charities' accounts before Daniel Pearl's abduction". Retrieved 22 July 2007.
  10. ^ Reuters (25 October 2007). "Pearl widow drops lawsuit against al Qaeda". ABC News (Australia). "The withdrawal was done for personal reasons that had nothing to do with the merits of the lawsuit," a spokesperson for Mrs Pearl's lawyers Motley Rice said... The bank denied [, saying that] it had never supported terrorism. {{cite web}}: |author= has generic name (help)
  11. ^ Associated Press (24 October 2007). "Daniel Pearl's widow drops terror lawsuit: Wife of murdered journalist sought damages from al-Qaida, Pakistan bank". MSNBC. Mariane Pearl was represented by Motley Rice, a law firm based in Mount Pleasant, S.C. The firm has brought other suits against Middle Eastern banks and companies on behalf of 11 Sept. victims.
  12. ^ "Pakistani bank agrees to U.S. money-launder order". Retrieved 22 July 2007.
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