Bank Alfalah, one of Pakistan’s largest commercial banks, has decided to cease operations in Afghanistan and exit the country, Pakistani media reported on Wednesday.
The business daily Business Recorder said Bank Alfalah disclosed the decision in a notice to the Pakistan Stock Exchange. The bank has proposed transferring its operations to Ghazanfar Bank, according to the report.
The proposed transfer has received initial regulatory approvals, with the State Bank of Pakistan and Afghanistan’s central bank granting permissions that allow Ghazanfar Bank to begin due diligence, the newspaper said.
“In this regard, the State Bank of Pakistan has granted its in-principle approval/permission to the prospective buyer, Ghazanfar Bank, to commence the due diligence process relating to Bank Alfalah’s operations in Afghanistan,” the notice said, according to Business Recorder.
The transaction remains subject to the satisfactory completion of due diligence, execution of definitive agreements, compliance with relevant laws and regulations, and receipt of all required legal and regulatory approvals from authorities in both Pakistan and Afghanistan, the report added.
Analysts said Bank Alfalah, one of Pakistan’s largest private banks, has operated in Afghanistan for several years and that a potential divestment would mark a significant strategic shift. The bank started its commercial banking operations in Afghanistan in 2005, opening its first branch in Kabul that year. It later expanded with a branch in Herat.
Bank Alfalah operates in Afghanistan as a branch of a Pakistani bank. The bank is majority-owned by a group of investors from the United Arab Emirates and began operating in Afghanistan as an Islamic commercial bank through a joint Pakistani investment.
The bank is headquartered in Karachi, Pakistan’s largest city, and also operates in several other countries.
