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Financial Sector Case Studies

In: The Face of Privatization in Pakistan

Author

Listed:
  • Ghulam Samad

    (CAREC Institute)

  • Naseem Faraz

    (Pakistan Institute of Development Economics)

Abstract

The transition of Pakistan’s financial industry from state-controlled to privately owned entities through privatization has yielded diverse outcomes. Through a historical lens, this chapter analyses the impact of privatization on the financial sector in Pakistan, focusing on case studies of Allied Bank Limited (ABL) and Habib Bank Limited (HBL). The chapter outlines the challenges faced by ABL post-privatization, including a surge in non-performing loans (NPLs) and financial losses. This led to significant restructuring efforts by the State Bank of Pakistan (SBP) to stabilize the bank’s operations and prepare it for re-privatization. In contrast, HBL’s privatization experience, marked by management control transfer to Aga Khan Fund for Economic Development (AKFED), resulted in a swift turnaround and notable improvements in financial performance.” In light of these insights, the chapter advocates for a refined approach to privatization, one that carefully balances privatization objectives with broader economic development goals and ensures the resilience of the financial system.

Suggested Citation

  • Ghulam Samad & Naseem Faraz, 2024. "Financial Sector Case Studies," Springer Books, in: The Face of Privatization in Pakistan, chapter 0, pages 115-123, Springer.
    • Handle: RePEc:spr:sprchp:978-981-97-8385-4_9
    DOI: 10.1007/978-981-97-8385-4_9
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