KARACHI, Sept 14: The UK-based European giant Barclays Bank is interested to make investment in Pakistan and a team of its experts is coming early next week to explore the potential, highly placed banking sources told Dawn on Thursday.

The rising interest of the foreign banks in the financial sector has already involved several world top ranking banks in Pakistan.

Barclays is one of the largest financial services companies in the world. It has been involved in banking for over 300 years and operates in over 60 countries with more than 118,000 permanent employees.“Barclays Bank will explore possibility to buy a bank in Pakistan,” said the banking sources.

He said a number of banks are in line for sale and the foreign banks feel comfortable to invest in the high-yield banking sector. Standard Chartered Bank has recently acquired Union Bank which made it the largest foreign bank in Pakistan.

The foreign banks interest in Pakistan has boosted the image of its financial sector which has been making record profits for the last two and half years.

However, the high competitive situation has compelled small banks to either sell their entities or merge with the other banks.

According to a research report since 1998 small banks started disappearing from the market. The merger and sale is the world phenomenon and small banks are losing ground for the existence.

There were 46 schedule banks in 1997-98 in the country which, due to mergers and acquisition, had reduced to 39 as on Dec 31, 2005.

However, the acquisition of Union Bank was first of its type in Pakistan. The participation of foreign banks is still on the lower side in Pakistan.

“As on Dec 31, 2005, there were 11 foreign banks representing nine per cent of total banking sector assets,” said Mohammad Imran, researcher at JS and Company.

Currently, banking sector in Pakistan is highly concentrated. Top six banks represent 63pc of the total banking deposits (based on March 2006 data). Moreover, in terms of profitability these banks’ share is also 64 per cent.

Barclays is a UK-based financial services group, with a large international presence in Europe, the USA, Africa and Asia. Its presence in the financial sector of Pakistan would help the sector to bring it at par with the global banking standard.

For the year ended 31st December 2005, the Group achieved a pre-tax profit of £5,280m, up fifteen per cent on 2004. In 2005 Barclays paid approximately £3bn in taxes. In the six months ended June 30, 2006, Barclays made a pre-tax profit of £3,673 million, up 37pc on the same period in 2005.