Habib Bank AG Zurich, Pakistan Branches

MIGA has issued Habib Bank AG Zurich of Switzerland a $5.9 million guarantee covering its branch capital investment in Habib Bank AG Zurich, Pakistan Branches. The guarantee is for a period of up to 15 years and covers against the risks of transfer restriction and expropriation.

The investment aims to meet Habib’s immediate growth needs and help it comply with Basel II capitalization requirements. Habib currently has 17 branches in Pakistan and is planning to open four more. Habib employs about 675 people, and expects to add 100 new employees to its payroll by 2006. The bank will provide extensive training and benefits. Habib’s continued presence in Pakistan has a strong demonstration effect on the banking sector, with its emphasis on good corporate governance and its stable capital base, high liquidity, and close cooperation with regulatory bodies.

MIGA’s support to Habib fits into the World Bank Group strategy for Pakistan’s financial sector, which aims to increase competition and expand access to financial services.