Pakistan is one of the key emerging markets of South Asia with a total population of over 140 million people. Pakistan’s GDP is expected to grow at 3.6% during the year 2001-02.

The banking sector in Pakistan consists of Commercial Banks, Specialized Banking and other non-banking financial Institutions.

The key trends in the banking sector are as follows:

· Increased Merger & Acquisition activity in the banking sector with local private banks having made several domestic acquisitions.

· Large expansion of branch network and deposits by private and some foreign banks.

· Rationalisation of branches by nationalised banks

· Increased focus towards consumer finance

· Increased focus on attracting local rupee deposits

· Increased emphasis towards automation and customer service

· Reduction in the increase in non performing loans as a result of better governance of banks and greater accountability process initiated by the government

· Significant increase in inward remittance business as a result of governmental clamp down on unofficial remittance channels following September 11.

National Bank of Pakistan maintains its position as

The objective of restructuring of NBP are improving institutional productivity, cost rationalization and a much more focused marketing strategy. New management has been inducted which have wide experience of banking not only in Pakistan but with foreign banks also.

In November 2001, 10% share of NBP’s shares were offered to general public and listed on all domestic Stock Exchanges. The listing offer was oversubscribed approximately six times. Privatisation Commission has launched the second offering of 5 % (18. 652,000) Government of Pakistan shares in National Bank of Pakistan (NBP) to the general public with a green shoe option of additional 5 % shares in case of over subscription. The subscription list opened at the commencement of banking hours on the 7th October , 2002 and closed on the 9th October, 2002 at the close of banking hours. The market price of NBP's shares as at September 23, 2002 was Rs.22.90.

Since 1999 upto June 30, 2001, the total deposits have increased by about 20% with an almost similar increase in gross advances.

NBP showed noteworthy development related to investment in securities of Central and Provincial Governments, providing a stabilizing factor, which hitherto, had been lacking. The ratio of its investment with respect to the total investment of all Pakistani banks rose considerably.

Reduction in administrative costs versus total income

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