KARACHI, Dec 19: World’s second largest bank, Barclays, entered Pakistan as it received a licence from the State Bank on Wednesday.

Earlier, the same bank held negotiations to acquire a Pakistani bank, but the deal could not materialise.

The bank, which witnessed a tremendous financial growth in the last five years, however, got the licence to operate in the country.

Initially, the Barclays will invest $100 million and establish 10 branches in the main cities of the country.

The State Bank of Pakistan granted a banking licence to Barclays Bank Plc, UK to conduct banking business in Pakistan.

SBP Governor Dr Shamshad Akhtar handed over the licence to Mr Ahmed Khizer Khan, Chief Executive, Emerging Markets, Global Retail and Commercial Banking, Barclays Bank, at a ceremony held at the SBP, Karachi.

Speaking on the occasion, Dr Akhtar said the entry of Barclays in Pakistan would not only strengthen banking system of the country, it would also bring a significant amount of foreign direct investment and technology to launch innovative financial products.

The governor highlighted the speed and efficiency with which both the SBP and Barclays concluded this deal.

She added that given Barclays’ extensive network and experience, “she looks forward to Barclays as a partner in development of Pakistan which will gear itself in due course to enhance competition and efficiency in the banking system.”

Dr Akhtar said: “The entry of Barclays in Pakistan reflects the confidence of foreign banks in Pakistan’s banking system.”

She further said that in line with the recently released Financial Stability Review, Pakistani banking system had illustrated its capability to be strong and robust system which had great prospects and potential to grow given the retail market of this country as captured by its population base and growing per capita incomes.

Pakistani banking assets in last five years have grown from Rs2,223 billion to Rs4,884 billion; advances from Rs1,062 billion to Rs2,603 billion; and deposits from Rs1,678 billion to Rs3,691 billion, she added.

Mr Khizer announced the appointment of Mr Mohsin Nathani as the Country Head and Managing Director of Barclays in Pakistan.

Barclays will be established in Pakistan as a foreign banking company and operate in branch mode with a capital of US$100 million and will initially set up 10 branches in various cities of the country.

The issuance of licence to Barclays will add to the presence of foreign banks.

It will be the seventh foreign bank operating in Pakistan in branch mode, in addition to a number of foreign banks having locally incorporated subsidiaries.

As per the agreements of the licence, Barclays will need to comply with the SBP guidelines, if it plans conversion of it from branch mode to a local subsidiary.

Foreign banks have substantially increased their share in Pakistani banking system during the last five years.