KARACHI, Aug 10: Standard Chartered Bank has set a new trend in the banking industry of the country after having acquired Union Bank. Reports suggest that some more European banks are interested in increasing their stakes in the financial industry of Pakistan.

Higher-ups in the banking industry said that they expected the country to see more deals in the banking industry such as the merger of Union Bank. They said a lot of inquiries about the performance of financial institutions and regulatory laws were being received from European banks.

“We can only say that more mergers in the banking industry are possible in future,” said an official banking source.

Standard Chartered Bank Pakistan (SCBP) on Wednesday acquired controlling stakes with 80.86 per cent interest in Union Bank with an investment of $413 million. This was the biggest ever investment by a foreign bank in Pakistan.

Bankers said that the inquiries about banks and their performance were mostly coming from the European banks.

“More than half a dozen banks have shown their interest to invest in Pakistan but it is yet to take any shape,” said a top banker.

Bankers were not ready to identify the interested European banks saying that these banks did not like to open their search for investment opportunities before any concrete agreement.

Bankers said that the attraction was not just the surplus money floating in the European banking industry but the performance of banking industry in Pakistan was also attractive.

They said that banking reforms had strengthened the banking laws and prudential regulations had consolidated the working environment for the industry.

Analysts said that the increasing presence of European banks would improve the standard of Pakistani banks and new products would find place in the market.

“Strong foreign banks are coming here. They have deep roots in the banking which would certainly benefit the Pakistani industry,” said Salman Jafri, an analyst.

He said that implementation schedule of Basel-II in Pakistan had also created a good image of the banking industry while the record profit earnings were also consideration. National Bank of Pakistan has already taken initiatives for the implementation of the Basel-II while the foreign European banks are in advance stages to implement it.

Bankers said that new products with new innovative ideas would change the shape of banking in the country while the local banks would change themselves to bring their banking at par with the international standards.

Policy-makers at the State Bank believed that the banking environment has changed and the merger of the Union Bank was the outcome of the policies adopted by the SBP. The SBP has been pursuing the policy of merger of small banks with strong banks. However, the Union Bank was itself a high-profile bank.