Industrial and Commercial Bank of China (ICBC) is exploring options to enter the growing Pakistani market, which has seen a number of acquisitions by foreign banks in recent months, a top banker said on Thursday.
ICBC, China's biggest lender, is in talks with the National Bank of Pakistan (NBP), and both banks are likely to sign a memorandum of understanding (MoU) by the end of this month, NBP President Syed Ali Raza said.
"They probably want to look at financing infrastructure projects here, as many Chinese companies are working here, especially in the development of the Gwadar port," Raza told Reuters. NBP is Pakistan's biggest bank and both banks were working on how to develop a relationship, he added.
"We have agreed to work on the proposal of mutual co-operation, and an MoU in this regard is expected to be signed by the end of June, after approvals from the respective boards and stock exchanges," he said. He did not give any more details.
China's banks, cashed-up from share sales including ICBC's record 21.9 billion dollars IPO last year, are looking for opportunities to expand overseas as Chinese firms boost outward investment.
In Pakistan, major foreign companies, including Standard Chartered, ABN Amro and Temasek Holdings have been pushing to benefit from financial reforms that have laid the platform for rapid growth and rising incomes.
Standard Chartered, whose Standard Chartered Bank Pakistan Limited is listed on the Karachi Stock Exchange, became the largest foreign bank in Pakistan after the 487 million dollars purchase of Union Bank last year. Dutch bank ABN Amro is the second biggest foreign bank with 83 branches after the acquisition of Prime Bank this year.
Pakistan's NIB Bank Ltd, a subsidiary of Singapore state investor Temasek Holdings, said last month it would buy 70 percent of Pakistan's Picic, which controls Picic Commercial Bank, for 378 million dollars.