Interview: Sultan Allana Chairman of Habib Bank

Please tell us about the Aga Khan Fund for Economic Development’s role as an international development agency promoting private sector entrepreneurship?

AKFED is a for-profit international development agency that seeks to create economic capacity and opportunity in specific regions of the developing world. Its financial service institutions, some of which date back nearly 70 years, include commercial banks, microfinance banks, insurance companies and property development and management companies in nine countries, some of which are listed on local stock exchanges. Active also in the fields of industry, tourism development, infrastructure, media and aviation in 17 countries across South and Central Asia and sub-Saharan Africa, AKFED operates as a network of affiliates with more than 90 separate project companies with a combined annual revenue from its operating companies in excess of $1.5 billion. Over 35,000 people are employed in AKFED controlled and managed projects around the world. AKFED’s investments in Pakistan include the Habib Bank Ltd (HBL), Serena Hotels, New Jubilee Insurance Company, and New Jubilee Life Insurance Company and The First MicroFinanceBank Ltd.

As you said, the Fund seeks profits and economically viable enterprises through equity participation. In this context, what financial role does Habib Bank fulfill for the Aga Khan Development Network?

Habib Bank is the largest Pakistani bank in terms of its branch network, both on the domestic and on the international front. Under the restructuring plan, initiated by the government in 1997, business units were rationalized and energized to restore the banks profitability. An ambitious IT program was launched in 2001, which is now well underway. By the end of 2005, a very large part of the bank’s business will be online, which will enable the bank to increase its capability to deliver products effectively and efficiently throughout the more than 1,400 branches in Pakistan.

HBL is a universal service bank and as such it will take on the challenge of facilitating the development of the economy by supporting government initiatives and programs in the fields of such as agriculture finance, consumer finance, infrastructure development, small- and medium-sized enterprise (SME) development etc. However, it may be worth mentioning that the key driving factor will be enhancing shareholder value, which will not only impact AKFED’s investment in the bank but also the government’s, which owns 49% of the bank. We are also looking at ways in which we can cross-sell insurance and related services, which will impact on AKFED’s investment in the country’s premier insurance companies such as NJI and NJI Life as well as benefit the other shareholders of both these publicly quoted companies.

Complete at the source