The board of Habib Bank Limited (HBL), one of the country’s largest banks, has approved the incorporation of ‘HBL Zarai Services Limited’ as a wholly-owned subsidiary to promote Pakistan’s agriculture sector.

The development was shared by HBL in its notice to the Pakistan Stock Exchange (PSX) on Thursday.

“To promote the agriculture sector of Pakistan, the Board of Directors of the bank has approved the incorporation of ‘HBL Zarai Services Limited’ as a wholly owned subsidiary of the bank, subject to receipt of all regulatory approvals,” read the notice.

Earlier, HBL shared that it intends to establish a subsidiary to promote Pakistan’s agriculture sector.

“We would like to clarify that the bank (HBL) intends to set up a subsidiary, to promote the agriculture sector of Pakistan, for which a detailed feasibility report has been finalised,” said HBL in a notice back then.

HBL said that it is currently in the process of obtaining all regulatory approvals required for the incorporation of the said subsidiary.

HBL on Wednesday declared a consolidated profit before tax (PBT) of Rs51.5 billion for the first half of 2023 (January-June), nearly 50% higher than the same period of the previous year.

The PBT of Rs30 billion for the second quarter of 2023 (April-June) was the highest in HBL’s history based on performance of its core business lines.

Along with the results, HBL declared an interim dividend of Rs2.00 per share (20%), taking the total payout for H1’23 to Rs 3.50 per share.

Meanwhile, the agriculture sector, which is widely considered the backbone of Pakistan’s economy, saw a 27.5% growth in agri loans, after the agriculture lending financial institutions disbursed Rs 1.222 trillion on account of agricultural financing during the first nine months (July-March) of this fiscal year.